LEBANON, Tenn., Feb. 25, 2020 /PRNewswire/ -- Cracker Barrel Old
Country Store, Inc. ("Cracker Barrel" or the "Company")
(Nasdaq: CBRL) today reported its financial results for the
second quarter ended January 31,
2020.
Second Quarter Fiscal 2020 Highlights
- Comparable store restaurant sales growth of 3.8% and traffic of
-0.2% outperformed the casual dining industry. Comparable store
retail sales increased 1.3%.
- Operating income was $79.1
million, a 3.2% increase compared to the prior year.
- GAAP earnings per diluted share were $2.55, which includes an unfavorable impact to
earnings per diluted share for the quarter of ($0.15) from the Company's equity method
investment in its unconsolidated subsidiary Punch Bowl Social,
compared to prior year second quarter earnings per diluted share of
$2.52.
Commenting on the second quarter results, Cracker Barrel
President and Chief Executive Officer Sandra B. Cochran said, "I am pleased that we
continued to outperform the casual dining industry and that we
delivered solid operating income growth. The holidays are an
important time for Cracker Barrel, and I believe this quarter we
further strengthened our reputation as a destination for both
in-store and off-premise holiday dining occasions, as demonstrated
by the success of our Country Fried Turkey menu promotion and the
continued growth of our off-premise business. Our teams continued
to make progress on key initiatives, and I believe we are
well-positioned to build on our momentum in the back half of our
fiscal year."
Second Quarter Fiscal 2020 Results
Revenue
The Company reported total revenue of $846.1
million for the second quarter of fiscal 2020, representing
an increase of 4.2% over the second quarter of the prior year.
Cracker Barrel comparable store restaurant sales increased 3.8%, as
a 4.0% increase in average check offset a 0.2% decrease in
comparable store restaurant traffic. The average menu price
increase for the quarter was approximately 2.2%. Comparable store
retail sales increased 1.3% from the prior year quarter.
Operating Income
Operating income in the second
quarter was $79.1 million, or
9.4% of total revenue, an increase from the prior year quarter of
$76.7 million, or 9.5% of total
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.
Earnings per Diluted Share
GAAP earnings per
diluted share were $2.55, which
includes an unfavorable impact to earnings per diluted share for
the quarter of ($0.15) from the
Company's equity method investment in its unconsolidated subsidiary
Punch Bowl Social, compared to prior year second quarter earnings
per diluted share of $2.52.
Share Repurchases
The Company repurchased
$5.8 million in shares during the
second quarter.
Fiscal 2020 Outlook
The Company updated the following
components of its fiscal 2020 outlook:
- GAAP earnings per diluted share between $8.55 and $8.65
-
- This includes an expected loss from the Company's equity method
investment in its unconsolidated subsidiary, Punch Bowl Social,
resulting in an unfavorable GAAP earnings per diluted share impact
of approximately ($0.80)
- This also includes transactional and integration expenses
related to the Company's acquisition of Maple Street Biscuit
Company, which are expected to result in an unfavorable impact to
GAAP earnings per diluted share of approximately ($0.15)
- Cracker Barrel comparable store restaurant sales growth of 2.0%
to 2.5%
- Approximately flat comparable store retail sales growth
- Commodity inflation, on a constant mix basis, of 1.5% to
2.0%
- Depreciation expense of approximately $115 million
- Sustainable cost savings of approximately $11 million
- Capital expenditures of approximately $125 million
- An effective tax rate of approximately 16.0%, which includes an
expected tax benefit from the projected loss from the Company's
equity method investment in Punch Bowl Social
The Company reminds investors that its outlook for fiscal 2020
reflects a number of assumptions, many of which are outside the
Company's control.
Fiscal 2020 Second Quarter Conference Call
As
previously announced, the live broadcast of Cracker Barrel's
quarterly conference call will be available to the public on-line
at investor.crackerbarrel.com today beginning at 11:00 a.m. (ET). The on-line replay will be
available at 2:00 p.m. (ET) and
continue through March 10, 2020.
About Cracker Barrel Old Country
Store®
Cracker Barrel Old Country Store,
Inc. (Nasdaq: CBRL) shares warm welcomes and friendly service while
offering guests high-quality homestyle food and unique shopping —
all at a fair price. By creating a world filled with hospitality
and charm through an experience that combines dining and shopping,
guests are cared for like family. Established in 1969 in
Lebanon, Tenn., Cracker Barrel and
its affiliates operate 664 company-owned Cracker Barrel Old Country
Store® locations in 45 states and own the fast-casual concept Maple
Street Biscuit Company. For more information about the company,
visit crackerbarrel.com.
CBRL-F
Except for specific historical information, certain of the
matters discussed in this press release may express or imply
projections of revenues or expenditures, statements of plans and
objectives or future operations or statements of future economic
performance. These, and similar statements are forward-looking
statements concerning matters that involve risks, uncertainties and
other factors which may cause the actual performance of Cracker
Barrel Old Country Store, Inc. and its subsidiaries to differ
materially from those expressed or implied by this discussion. All
forward-looking information is subject to completion of our
financial procedures for Q2 FY 2020 and is provided pursuant to the
safe harbor established under the Private Securities Litigation
Reform Act of 1995 and should be evaluated in the context of these
factors. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as "trends,"
"assumptions," "target," "guidance," "outlook," "opportunity,"
"future," "plans," "goals," "objectives," "expectations,"
"near-term," "long-term," "projection," "may," "will," "would,"
"could," "expect," "intend," "estimate," "anticipate," "believe,"
"potential," "regular," "should," "projects," "forecasts," or
"continue" (or the negative or other derivatives of each of these
terms) or similar terminology and include the expected effects of
operational improvement initiatives, such as new menu items and
retail offerings. Factors which could materially affect actual
results include, but are not limited to: the effects of uncertain
consumer confidence, higher costs for energy, general or regional
economic weakness, and weather on sales and customer travel,
discretionary income or personal expenditure activity of our
customers; information technology-related incidents, including data
privacy and information security breaches, whether as a result of
infrastructure failures, employee or vendor errors, or actions of
third parties; our ability to identify, acquire and sell successful
new lines of retail merchandise and new menu items at our
restaurants; our ability to sustain or the effects of plans
intended to improve operational or marketing execution and
performance; uncertain performance of acquired businesses,
strategic investments and other initiatives that we may pursue now
or in the future, including our integration of Maple Street Biscuit
Company and our non-controlling ownership interest in Punch Bowl
Social; changes in or implementation of additional governmental or
regulatory rules, regulations and interpretations affecting tax,
wage and hour matters, health and safety, pensions, insurance or
other undeterminable areas; the effects of plans intended to
promote or protect our brands and products; commodity price
increases; the ability of and cost to us to recruit, train, and
retain qualified hourly and management employees in an escalating
wage environment; the effects of increased competition at our
locations on sales and on labor recruiting, cost, and retention;
workers' compensation, group health and utility price changes;
consumer behavior based on negative publicity or concerns over
nutritional or safety aspects of our food or products or those of
the restaurant industry in general, including concerns about
pandemics, as well as the possible effects of such events on the
price or availability of ingredients used in our restaurants; the
effects of our indebtedness and associated restrictions on our
financial and operating flexibility and ability to execute or
pursue our operating plans and objectives; changes in interest
rates or capital market conditions affecting our financing costs
and ability to refinance all or portions of our indebtedness; the
effects of business trends on the outlook for individual restaurant
locations and the effect on the carrying value of those locations;
our ability to retain key personnel; the availability and cost of
suitable sites for restaurant development and our ability to
identify those sites; our ability to enter successfully into new
geographic markets that may be less familiar to us; changes in
land, building materials and construction costs; the actual results
of pending, future or threatened litigation or governmental
investigations and the costs and effects of negative publicity
associated with these activities; practical or psychological
effects of natural disasters or terrorist acts or war and military
or government responses; disruptions to our restaurant or retail
supply chain; changes in foreign exchange rates affecting our
future retail inventory purchases; implementation of new or changes
in interpretation of existing accounting principles generally
accepted in the United States of
America ("GAAP"); and other factors described from time to
time in our filings with the Securities and Exchange Commission,
press releases, and other communications. Any forward-looking
statement made by us herein, or elsewhere, speaks only as of the
date on which made. We expressly disclaim any intent, obligation or
undertaking to update or revise any forward-looking statements made
herein to reflect any change in our expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based.
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED
CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands,
except share and per share amounts, percentages and
ratios)
|
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
Percentage
|
|
|
|
|
|
Percentage
|
1/31/20
|
|
2/1/19
|
|
Change
|
|
1/31/20
|
|
2/1/19
|
|
Change
|
Total
revenue
|
$846,143
|
|
$811,707
|
|
4%
|
|
$1,595,183
|
|
$1,545,250
|
|
3%
|
Cost of goods sold,
(exclusive of
depreciation and
rent)
|
272,207
|
|
265,179
|
|
3
|
|
492,021
|
|
487,472
|
|
1
|
Labor and other
related expenses
|
284,777
|
|
276,774
|
|
3
|
|
548,091
|
|
534,933
|
|
2
|
Other store operating
expenses
|
171,638
|
|
156,819
|
|
9
|
|
334,546
|
|
309,297
|
|
8
|
General and
administrative
expenses
|
38,386
|
|
36,224
|
|
6
|
|
78,017
|
|
75,159
|
|
4
|
Operating
income
|
79,135
|
|
76,711
|
|
3
|
|
142,508
|
|
138,389
|
|
3
|
Interest
expense
|
3,505
|
|
4,177
|
|
(16)
|
|
7,085
|
|
8,526
|
|
(17)
|
Pretax
income
|
75,630
|
|
72,534
|
|
4
|
|
135,423
|
|
129,863
|
|
4
|
Provision for income
taxes
|
10,878
|
|
11,779
|
|
(8)
|
|
21,468
|
|
21,901
|
|
(2)
|
Income (loss) from
unconsolidated
subsidiary
|
(3,584)
|
|
0
|
|
|
|
(9,564)
|
|
0
|
|
|
Net income
|
$61,168
|
|
$60,755
|
|
1
|
|
$104,391
|
|
$107,962
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share –
Basic:
|
$2.55
|
|
$2.53
|
|
1
|
|
$4.35
|
|
$4.49
|
|
(3)
|
Earnings per share –
Diluted:
|
$2.55
|
|
$2.52
|
|
1
|
|
$4.34
|
|
$4.48
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
23,950,811
|
|
24,040,374
|
|
(0)
|
|
23,994,583
|
|
24,031,480
|
|
(0)
|
Diluted
|
24,005,817
|
|
24,093,725
|
|
(0)
|
|
24,054,870
|
|
24,083,723
|
|
(0)
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio
Analysis
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant
|
78.4%
|
|
77.8%
|
|
|
|
79.6%
|
|
79.1%
|
|
|
Retail
|
21.6
|
|
22.2
|
|
|
|
20.4
|
|
20.9
|
|
|
Total revenue
|
100.0
|
|
100.0
|
|
|
|
100.0
|
|
100.0
|
|
|
Cost of goods sold,
(exclusive of
depreciation and
rent)
|
32.2
|
|
32.7
|
|
|
|
30.8
|
|
31.5
|
|
|
Labor and other
related expenses
|
33.6
|
|
34.1
|
|
|
|
34.4
|
|
34.7
|
|
|
Other store operating
expenses
|
20.3
|
|
19.3
|
|
|
|
21.0
|
|
20.0
|
|
|
General and
administrative expenses
|
4.5
|
|
4.4
|
|
|
|
4.9
|
|
4.8
|
|
|
Operating
income
|
9.4
|
|
9.5
|
|
|
|
8.9
|
|
9.0
|
|
|
Interest
expense
|
0.5
|
|
0.6
|
|
|
|
0.4
|
|
0.6
|
|
|
Pretax
income
|
8.9
|
|
8.9
|
|
|
|
8.5
|
|
8.4
|
|
|
Provision for income
taxes
|
1.3
|
|
1.4
|
|
|
|
1.4
|
|
1.4
|
|
|
Income (loss) from
unconsolidated subsidiary
|
(0.4)
|
|
0.0
|
|
|
|
(0.6)
|
|
0.0
|
|
|
Net income
|
7.2%
|
|
7.5%
|
|
|
|
6.5%
|
|
7.0%
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited and in
thousands, except share amounts)
|
|
1/31/20
|
|
2/1/19
|
|
Assets
|
|
|
|
|
Cash and
cash equivalents
|
$72,840
|
|
$169,564
|
|
Accounts
receivable
|
20,778
|
|
16,977
|
|
Inventory
|
157,352
|
|
151,402
|
|
Prepaid
expenses and other current assets
|
35,100
|
|
21,200
|
|
Property
and equipment, net
|
1,176,747
|
|
1,162,186
|
|
Operating lease right-of-use assets, net
|
465,685
|
|
0
|
|
Investment in unconsolidated subsidiary
|
79,536
|
|
0
|
|
Other
assets
|
122,514
|
|
66,474
|
|
Goodwill
|
6,364
|
|
0
|
|
Total assets
|
$2,136,916
|
|
$1,587,803
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Accounts
payable
|
$123,318
|
|
$117,885
|
|
Other
current liabilities
|
321,566
|
|
262,245
|
|
Long-term debt
|
460,000
|
|
400,000
|
|
Long-term operating lease liabilities
|
460,840
|
|
0
|
|
Other
long-term obligations
|
85,927
|
|
127,719
|
|
Deferred
income taxes
|
55,335
|
|
51,336
|
|
Shareholders' equity, net
|
629,930
|
|
628,618
|
|
Total liabilities and shareholders' equity
|
$2,136,916
|
|
$1,587,803
|
|
|
|
|
|
|
Common shares issued
and outstanding
|
23,943,248
|
|
24,041,374
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited and in
thousands)
|
|
Six Months
Ended
|
|
1/31/20
|
|
2/1/19
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$104,391
|
|
$107,962
|
Net loss from unconsolidated subsidiary
|
9,564
|
|
0
|
Depreciation and amortization
|
58,277
|
|
51,056
|
Loss on disposition of property and equipment
|
4,005
|
|
5,760
|
Impairment
|
664
|
|
0
|
Share-based compensation, net of excess tax benefit
|
3,920
|
|
4,133
|
Noncash lease expense
|
30,845
|
|
0
|
(Increase) decrease in inventories
|
(2,167)
|
|
4,851
|
(Decrease) in accounts payable
|
(10,779)
|
|
(4,447)
|
Net changes in other assets and liabilities
|
(14,716)
|
|
21,548
|
Net cash provided by operating activities
|
184,004
|
|
190,863
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property and equipment, net of insurance
recoveries
|
(58,289)
|
|
(69,829)
|
Proceeds from sale of property and equipment
|
1,565
|
|
91
|
Notes receivable from unconsolidated subsidiary
|
(33,000)
|
|
0
|
Acquisition of business, net of cash acquired
|
(32,971)
|
|
0
|
Net cash (used in) investing activities
|
(122,695)
|
|
(69,738)
|
Cash flows from
financing activities:
|
|
|
|
Net proceeds from long-term debt
|
60,000
|
|
0
|
(Taxes withheld) from issuance of share-based compensation
awards
|
(1,994)
|
|
(2,057)
|
Purchases and retirement of common stock
|
(20,000)
|
|
0
|
Deferred financing costs
|
0
|
|
(3,022)
|
Dividends on common stock
|
(63,359)
|
|
(61,138)
|
Net cash (used in) financing activities
|
(25,353)
|
|
(66,217)
|
|
|
|
|
Net increase in
cash and cash equivalents
|
35,956
|
|
54,908
|
Cash and cash
equivalents, beginning of period
|
36,884
|
|
114,656
|
Cash and cash
equivalents, end of period
|
$72,840
|
|
$169,564
|
|
|
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
Supplemental
Information
(Unaudited)
|
|
Second Quarter
Ended
|
|
Six Months
Ended
|
|
1/31/20
|
|
2/1/19
|
|
1/31/20
|
|
2/1/19
|
Company-owned units
in operation:
|
|
|
|
|
|
|
|
Open at beginning of
period
|
695
|
|
663
|
|
667
|
|
660
|
Maple Street units acquired
during period
|
-
|
|
-
|
|
28
|
|
-
|
Opened during
period
|
1
|
|
2
|
|
1
|
|
5
|
Closed during
period
|
(1)
|
|
(1)
|
|
(1)
|
|
(1)
|
Total company-owned units at
end of period
|
695
|
|
664
|
|
695
|
|
664
|
|
|
|
|
|
|
|
|
Total revenue: (In
thousands)
|
|
|
|
|
|
|
|
Restaurant
|
$663,043
|
|
$631,175
|
|
$1,270,122
|
|
$1,222,153
|
Retail
|
183,100
|
|
180,532
|
|
325,061
|
|
323,097
|
Total
revenue
|
$846,143
|
|
$811,707
|
|
$1,595,183
|
|
$1,545,250
|
|
|
|
|
|
|
|
|
Cost of goods sold
(exclusive of depreciation and
rent): (In thousands)
|
|
|
|
|
|
|
|
Restaurant
|
$172,676
|
|
$165,861
|
|
$322,133
|
|
$315,049
|
Retail
|
99,531
|
|
99,318
|
|
169,888
|
|
172,423
|
Total cost of goods
sold
|
$272,207
|
|
$265,179
|
|
$492,021
|
|
$487,472
|
|
|
|
|
|
|
|
|
Average unit
volume*: (In thousands)
|
|
|
|
|
|
|
|
Restaurant
|
$985.3
|
|
$950.4
|
|
$1,893.7
|
|
$1,843.9
|
Retail
|
274.6
|
|
$271.8
|
|
487.4
|
|
487.5
|
Total
|
$1,259.9
|
|
$1,222.2
|
|
$2,381.1
|
|
$2,331.4
|
Operating
weeks:
|
8,668
|
|
8,634
|
|
17,339
|
|
17,233
|
Note*: Average unit
volumes include sales of all stores except Maple Street Biscuit
Company.
|
|
|
|
|
|
|
|
|
|
Q2 2020 vs. Q2
2019
|
|
6 mo. 2020 vs. 6
mo. 2019
|
Comparable Cracker
Barrel store sales period to period increase:
|
|
|
|
|
Restaurant
|
|
3.8%
|
|
3.0%
|
Retail
|
|
1.3%
|
|
0.4%
|
|
|
|
|
|
Number of Cracker
Barrel locations in comparable store base:
|
|
651
|
|
647
|
Investor
Contact:
|
Adam
Hanan
|
|
(615)
443-9887
|
|
|
Media
Contact:
|
Janella
Escobar
|
|
(615)
235-4618
|
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multimedia:http://www.prnewswire.com/news-releases/cracker-barrel-reports-second-quarter-fiscal-2020-results-and-updates-guidance-301010189.html
SOURCE Cracker Barrel Old Country Store, Inc.