Cracker Barrel Reports First Quarter Fiscal 2022 Results and Declares Quarterly Dividend

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) yesterday reported its financial results for the first quarter of fiscal 2022 ended October 29, 2021.

First Quarter Fiscal 2022 Highlights

  • Compared to the first quarter of fiscal 20191, comparable store restaurant sales increased 1.4% and comparable store retail sales increased 17.6%.
    • Comparable store off-premise restaurant sales grew 168% compared to the first quarter of 20191 and represented approximately 20% of restaurant sales.
  • GAAP operating income in the first quarter was $42.9 million, or 5.5% of total revenue, and adjusted2 operating income was $46.1 million, or 5.9% of total revenue.
  • GAAP net income was $33.4 million, or 4.3% of total revenue. EBITDA2 was $71.9 million, or 9.2% of total revenue.
  • GAAP earnings per diluted share were $1.41, and adjusted2 earnings per diluted share were $1.52.
  • The Company’s Board of Directors declared a quarterly dividend of $1.30 per share on the Company’s common stock, payable on February 1, 2022 to shareholders of record on January 14, 2022.

Commenting on the business, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, “I’m pleased with the improvement we saw in our first quarter comparable restaurant sales and the continued strength of our retail sales. The progress we made on staffing and the incredible efforts of our operating teams contributed significantly to our sales results in the first quarter and positioned us well for the important holiday season and our second quarter generally. Although we still face an uncertain business environment, our sales trends give us confidence that we should see further improvement in our comparable store sales in the second quarter.  We believe that as our guests return to a more traditional holiday season and look to Cracker Barrel to be a part of their family gatherings and celebrations with friends, our dedicated and talented employees and leadership teams will meet their expectations, whether they visit our retail shops and dining rooms, or enjoy our food at home.”

First Quarter Fiscal 2022 Results
Revenue 
The Company reported total revenue of $784.9 million for the first quarter of fiscal 2022, representing an increase of 21.4% compared to the first quarter of fiscal 2021, and an increase of 7.0% compared to the first quarter of 2019. Cracker Barrel comparable store restaurant and retail sales compared to the first quarter of fiscal 20191 and versus the first quarter of fiscal 2021 were as follows:

Versus FY19
Comparable Period1

Versus FY21

Comparable Period

First Quarter Ended
10/29/21

First Quarter Ended
10/29/21

Comparable restaurant sales

1.4%

19.0%

Comparable retail sales

17.6%

29.1%

The Company believes that providing comparable store sales results back to fiscal 2019, which is the most recent full fiscal year that was not impacted by COVID-19, provides a more useful comparison than comparing to COVID-impacted periods.

Operating Income
GAAP operating income in the first quarter was $42.9 million, or 5.5% of total revenue, an 81.9% decrease compared to prior year quarter GAAP operating income of $237.1 million, or 36.7% of total revenue. Excluding the approximately $3.2 million in non-cash amortization related to the gains on the previously disclosed sale and leaseback transactions, adjusted2 operating income for the first quarter was $46.1 million, or 5.9% of total revenue, a 66.3% increase over the prior year quarter adjusted2 operating income of $27.7 million, or 4.3% of total revenue.

Net Income and EBITDA
GAAP net income in the first quarter was $33.4 million, or 4.3% of total revenue, an 80.4% decrease compared to prior year GAAP net income of $170.7 million, or 26.4% of total revenue. Adjusted EBITDA was $71.9 million, or 9.2% of total revenue, a 32.9% increase over the prior year quarter adjusted EBITDA of $54.1 million, or 8.4% of total revenue.

Earnings per Diluted Share
GAAP earnings per diluted share were $1.41, an 80.4% decrease compared to the prior year quarter GAAP earnings per diluted share of $7.18. Adjusted2 earnings per diluted share were $1.52, a 120.3% increase over the prior year quarter adjusted2 earnings per diluted share of $0.69.

Quarterly Dividend
The Company’s Board of Directors declared a quarterly dividend to common shareholders of $1.30 per share, payable on February 1, 2022 to shareholders of record on January 14, 2022.  

Second Quarter and Fiscal 2022 Outlook
The Company expects second quarter comparable store restaurant sales growth versus fiscal 2019 to be higher than it was in the first quarter and adjusted operating margin in the second quarter of between 5.5% and 6.0% of revenue. Operating margins in the second quarter will continue to be impacted by significant wage, commodity, and other operating expenses inflation, as well as higher expenses associated with an elevated off-premise special occasion business.

In light of the continued uncertainties in the current environment, most notably with respect to commodity and wage inflation, the Company is not providing its customary annual earnings guidance for fiscal 2022 at this time.

For the full fiscal year 2022, the Company expects:

  • Commodity and constant mix wage inflation in the high single digits;
  • Capital expenditures of approximately $120 million;
  • An effective tax rate of approximately 17%; and
  • The opening of three new Cracker Barrel locations and 15 new Maple Street Biscuit Company locations.

The Company reminds investors that its outlook for fiscal 2022 reflects a number of assumptions, many of which are outside the Company’s control. 

About Cracker Barrel Old Country Store
Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate more than 660 company-owned Cracker Barrel Old Country Store locations in 45 states and own the fast-casual Maple Street Biscuit Company.

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENT

(Unaudited)

(In thousands, except share and per share amounts, percentages and ratios) 

First Quarter Ended

Percentage

10/29/21

10/30/20

Change

Total revenue

$784,930

$646,454

21%

Cost of goods sold, exclusive of
   depreciation and rent

242,771

199,044

22

Labor and other related expenses

274,657

227,188

21

Other store operating expenses

183,679

161,274

14

General and administrative expenses

40,910

39,564

3

Gain on sale and leaseback transactions

0

(217,722)

(100)

Operating income

42,913

237,106

(82)

Interest expense

2,629

10,715

(75)

Income before income taxes

40,284

226,391

(82)

Provision for income taxes

6,908

55,711

(88)

Net income

$33,376

$170,680

(80)

Earnings  per share – basic:

$1.42

$7.20

(80)

Earnings per share – diluted:

$1.41

$7.18

(80)

Weighted average shares:

    Basic

23,507,361

23,707,750

(1)

    Diluted

23,593,882

23,771,230

(1)

Ratio Analysis

Total revenue:

    Restaurant

78.4%

79.7%

    Retail

21.6

20.3

            Total revenue

100.0

100.0

Cost of goods sold, exclusive of
   depreciation and rent

30.9

30.8

Labor and other related expenses

35.0

35.1

Other store operating expenses

23.4

25.0

General and administrative expenses

5.2

6.1

Gain on sale and leaseback transactions

0.0

(33.7)

Operating income

5.5

36.7

Interest expense

0.4

1.7

Income before income taxes

5.1

35.0

Provision for income taxes

0.8

8.6

Net income

4.3%

26.4%

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited and in thousands, except share amounts)

10/29/21

10/30/20

Assets

   Cash and cash equivalents

$125,865

$597,619

   Accounts receivable

30,197

22,338

   Inventories

159,633

155,737

   Prepaid expenses and other current assets

41,528

49,169

   Property and equipment, net

967,099

1,006,371

   Operating lease right-of-use assets, net

966,866

1,009,509

   Intangible assets

21,267

20,960

   Other assets

55,592

53,729

   Goodwill

4,690

4,690

           Total assets

$2,372,737

$2,920,122

Liabilities and Shareholders’ Equity

   Accounts payable

$138,199

$136,051

   Other current liabilities

311,448

308,565

   Long-term debt

376,974

910,000

   Long-term operating lease liabilities

744,150

773,204

   Other long-term obligations

86,562

117,965

   Deferred income taxes

86,189

82,725

   Shareholders’ equity, net

629,215

591,612

          Total liabilities and shareholders’ equity

$2,372,737

$2,920,122

Common shares issued and outstanding

23,519,857

23,720,324

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

(Unaudited and in thousands)

Three Months Ended

10/29/21

10/30/20

Cash flows from operating activities:

             Net income 

$33,376

$170,680

             Depreciation and amortization

25,788

26,351

             Amortization of debt issuance costs

479

0

             Loss on disposition of property and equipment

1,870

801

             Gain on sale and leaseback transactions

0

(217,722)

             Share-based compensation

2,309

1,974

             Noncash lease expense

14,329

13,888

             Amortization of asset recognized from gain on sale and leaseback transaction

3,184

3,184

             (Increase) in inventories

(21,313)

(16,646)

             Increase in accounts payable

3,023

32,547

             Net changes in other assets and liabilities

(40,022)

41,934

                           Net cash provided by operating activities

23,023

56,991

Cash flows from investing activities:

             Purchase of property and equipment, net of insurance recoveries

(14,053)

(11,214)

             Proceeds from sale of property and equipment

14

149,829

             Acquisition of business, net of cash acquired

(1,500)

(1,500)

                           Net cash (used in) provided by investing activities

(15,539)

137,115

Cash flows from financing activities:

              (Taxes withheld) from issuance of share-based compensation awards

(2,309)

(1,992)

              Dividends on common stock

(23,903)

(31,491)

                           Net cash (used in) financing activities

(26,212)

(33,483)

Net increase (decrease) in cash and cash equivalents

(18,728)

160,623

Cash and cash equivalents, beginning of period

144,593

436,996

Cash and cash equivalents, end of period

$125,865

$597,619

CRACKER BARREL OLD COUNTRY STORE, INC.

Supplemental Information

(Unaudited)

First Quarter Ended

10/29/21

10/30/20

Net Change in Company-Owned Units During
Quarter:

    Cracker Barrel

0

0

    Maple Street Biscuit Company

0

0

Company-Owned Units in Operation at End of
Quarter:

    Cracker Barrel

664

663

    Maple Street Biscuit Company

37

35

First Quarter Ended

10/29/21

10/30/20

Total revenue*: (In thousands)

      Restaurant

$604,278

$507,241

      Retail

169,386

131,230

      Total revenue

$773,664

$638,471

Cost of goods sold* (exclusive of
depreciation and rent): (In thousands)

      Restaurant

$157,787

$130,814

      Retail

82,376

66,431

      Total cost of goods sold

$240,163

$197,245

Average unit volume*: (In thousands)

      Restaurant

$910.1

$765.0

      Retail

255.1

197.9

      Total

$1,165.2

$962.9

Operating Weeks*

8,632

8,620

* This information is for Cracker Barrel stores only and excludes Maple Street Biscuit Company

Q1 2022 vs. Q1 2021

Comparable Cracker Barrel store sales period to period increase:

Restaurant

19.0%

Retail

29.1%

Number of Cracker Barrel locations in comparable store base:

659

CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP-basis operating results to non-GAAP operating results
(Unaudited and in thousands, except per share amounts)

Adjusted Operating Income and Earnings Per Share
In the accompanying press release, the Company makes reference to its first quarter fiscal 2021 and fiscal 2022 adjusted operating income and earnings per share. In regards to fiscal 2022, this reconciliation excludes non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions and the related tax impact. In regards to fiscal 2021, this reconciliation excludes the gain on sale of assets from the sale and leaseback transaction that closed in the first quarter, non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions, expenses related to the proxy contest initiated by affiliates of Sardar Biglari in connection with the Company’s 2020 annual meeting of shareholders, and the related tax impacts of these items. The Company believes excluding these items from its financial results provides investors with an enhanced understanding of the Company’s financial results and enhances comparability across periods. This information is not intended to be considered in isolation or as a substitute for operating income or earnings per share information prepared in accordance with GAAP.

First Quarter Ended October 29, 2021

As Reported

Adjustment

As Adjusted

(1)

Total Revenue

$784,930

$784,930

Store operating expense

701,107

(3,184)

697,923

General and administrative expense

40,910

40,910

Operating income

42,913

3,184

46,097

Interest expense

2,629

2,629

Income before income taxes

40,284

3,184

43,468

Provision for income taxes

6,908

748

7,656

Net income

$33,376

$2,436

$35,812

Earnings per share – basic

$1.42

$0.10

$1.52

Earnings per share – diluted

$1.41

$0.11

$1.52

(1) Adjusted for the non-cash amortization of the asset recognized from the gain on sale and leaseback transactions
and related tax impacts

 

First Quarter Ended October 30, 2020

As Reported

Adjustment

As Adjusted

(1) (2) (3) (4)

Total Revenue

$646,454

$646,454

Store operating expense

587,506

(3,184)

584,322

General and administrative expense

39,564

(5,154)

34,410

Gain on sale and leaseback
    transaction

(217,722)

217,722

Operating income

237,106

(209,384)

27,722

Interest expense

10,715

10,715

Income before income taxes

226,391

(209,384)

17,007

Provision for income taxes

55,711

(55,038)

673

Net income

$170,680

($153,346)

$16,334

Earnings per share – basic

$7.20

($6.51)

$0.69

Earnings per share – diluted

$7.18

($6.49)

$0.69

(1) Adjusted for the non-cash amortization of asset recognized from the gain on sale and leaseback transactions

(2) Adjusted for proxy contest-related expenses

(3) Adjusted for the gain on sale of assets related to the sale and leaseback transaction

(4) Adjusted for the tax impacts of (1), (2), and (3) above

CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP-basis operating results to non-GAAP operating results (Unaudited and in thousands)

EBITDA
In the accompanying press release, the Company makes reference to its first quarter fiscal 2021 and 2022 EBITDA. The Company defines EBITDA as net income excluding depreciation and amortization, non-cash amortization of the asset recognized from the gains on sale and leaseback transactions, interest expense and tax expense. This information is not intended to be considered in isolation or as a substitute for net income prepared in accordance with GAAP.

First Quarter
Ended October
29, 2021

First Quarter
Ended October
30, 2020

Net Income

$           33,376

$            170,680

 (+) Depreciation & Amortization

25,788

26,351

 (+) Amortization of asset recognized from gain on sale and leaseback transactions

3,184

3,184

 (+) Interest Expense

2,629

10,715

 (+) Tax Expense

6,908

55,711

EBITDA

$           71,855

$            266,641

Adjustments

 (-) Gain on sale and leaseback transaction

(217,722)

 (+) Proxy contest-related expenses

5,154

Adjusted EBITDA

$           71,855

$              54,073

Investor Contact:

Jessica Hazel

(615) 235-4367

Media Contact:

Heidi Pearce

(615) 235-4135

SOURCE Cracker Barrel Old Country Store, Inc.