Cracker Barrel Reports Strong Fourth Quarter And Full Year Fiscal 2019 Results

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) today reported its financial results for the fourth quarter of fiscal 2019 ended August 2, 2019.

Fourth Quarter Fiscal 2019 Highlights

  • Comparable store restaurant sales growth of 3.8% and traffic growth of 0.2% outperformed the casual dining industry.
  • Earnings per diluted share were $2.70 compared to prior year fourth quarter GAAP earnings per diluted share of $2.55, or $2.19 per share when adjusting for the impact of the prior year 53rd week.
  • As previously announced, the Company entered into a strategic relationship with Punch Bowl Social (“PBS”) on July 18, 2019 by acquiring a non-controlling ownership stake in PBS.

Full Year Fiscal 2019 Highlights

  • For the full fiscal year, comparable store restaurant sales growth of 2.6% and traffic of -0.7% outperformed the casual dining industry.
  • Fiscal 2019 earnings per diluted share were $9.27 compared to prior year GAAP earnings per diluted share of $10.29 (including a $1.06 per share benefit in Q2 2018 resulting from a one-time non-cash revaluation of the Company’s deferred tax liability in conjunction with the Tax Cut and Jobs Act of 2017) and adjusted earnings per diluted share of $8.87 (see non-GAAP reconciliation below).
  • During fiscal 2019, the Company declared regular quarterly dividends totaling $5.05 per share. Additionally, the Company declared a special dividend of $3.00 per share, bringing the total declared dividends in fiscal 2019 to $8.05 per share.

Commenting on the fourth quarter and full year results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, “In fiscal 2019, our teams drove performance through an increased focus on our menu, the guest experience, and the continued expansion of our off-premise business. We ended the fiscal year with a strong quarter, delivering comparable store restaurant sales and traffic growth in the fourth quarter that outperformed the casual dining industry, and I was especially pleased with the results of our Signature Fried Chicken initiative. As we enter our 50th year of Pleasing People, we believe our fiscal 2020 business plans will help build on our momentum and support long-term value creation.”

Fourth Quarter Fiscal 2019 Results
Revenue
The Company reported total revenue of $787.1 million for the fourth quarter of fiscal 2019, representing a decrease of 2.9% over the fourth quarter of the prior year, which included a 53rd week. Adjusting for the impact of the extra week in fiscal 2018, revenue increased 4.6%. Cracker Barrel comparable store restaurant sales increased 3.8%, representing a 3.6% increase in average check and a 0.2% increase in comparable store restaurant traffic. The average menu price increase for the quarter was approximately 2.3%. Comparable store retail sales increased 0.4% from the prior year quarter.

Cracker Barrel comparable store restaurant traffic, average check, and comparable store restaurant sales and retail sales for the fourth quarter were as follows:

Fourth Quarter

Comparable restaurant traffic

0.2%

Average check

3.6%

Comparable restaurant sales

3.8%

Comparable retail sales

0.4%

Operating Income
Operating income in the fourth quarter was $79.4 million, or 10.1% of total revenue, a decrease from the prior year quarter of $82.8, or 10.2% of revenue. As a percentage of total revenue, increases in other operating expenses and general and administrative expenses were partially offset by reductions in cost of goods sold and labor and related expenses. Adjusted for the impact of the 53rd week, prior year operating income was $71.5 million, or 9.5% of sales.   

Earnings per Diluted Share
Earnings per diluted share were $2.70 compared to prior year fourth quarter GAAP earnings per diluted share of $2.55, or $2.19 per share when adjusting for the impact of the 53rd week.

Fiscal 2019 Results
The Company reported total revenue of $3.07 billion for the fiscal year, representing an increase of 1.4% over the prior year. Adjusted for the 53rd week in the prior fiscal year, total revenue increased by 3.4%. Comparable store restaurant sales increased 2.6%, including a 3.3% increase in average check partially offset by a 0.7% decrease in store traffic. Comparable store retail sales increased 0.1% for the fiscal year.

Operating income for fiscal 2019 was $282.8 million, or 9.2% of total revenue, compared to $293.6 million, or 9.7% of total revenue, in the prior year. Adjusted for the 53rd week in the prior fiscal year, operating income was $282.4 million, or 9.5% of total revenue.

Fiscal 2019 earnings per diluted share were $9.27 compared to prior year GAAP earnings per diluted share of $10.29 (including a $1.06 per share benefit in Q2 2018 resulting from a one-time non-cash revaluation of the Company’s deferred tax liability in conjunction with the Tax Cut and Jobs Act of 2017) and adjusted earnings per diluted share of $8.87 (see non-GAAP reconciliation below).

Fiscal 2020 Outlook
The Company is providing the following outlook for fiscal 2020:

  • Total revenue of $3.15 billion to $3.20 billion
  • Comparable store restaurant sales growth of 2.0% to 3.0%
  • Comparable store retail sales growth of approximately 1.0%
  • Operating income margin of approximately 9.0% as a percent of total revenue
  • Depreciation expense of $110 million to $115 million
  • Net interest expense of approximately $14 million
  • Capital expenditures of $115 million to $125 million
  • An effective tax rate of approximately 17.0%, which assumes a renewal of the Work Opportunity Tax Credit
  • Earnings per diluted share, excluding any impacts from Punch Bowl Social, between $9.30 and $9.45
  • The Company anticipates its investment in Punch Bowl Social will have an unfavorable impact of approximately $0.50, driven primarily by pre-opening expenses; taking these impacts into account, the Company expects to report earnings per diluted share between $8.80 and $8.95

The Company reminds investors that its outlook for fiscal 2020 reflects a number of assumptions, many of which are outside the Company’s control.

About Cracker Barrel Old Country Store®
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real homestyle food and shopping that’s surprisingly unique, genuinely fun and reminiscent of America’s country heritage – all at a fair price. Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate 660 company-owned Cracker Barrel Old Country Store® locations in 45 states and own the fast-casual Holler and Dash® restaurants.