Cracker Barrel Old Country Store, Inc. Earnings: Will the Restaurant Keep Climbing?

The restaurant chain had a tough quarter last time around. Will it do better this time?

May 26, 2014 at 9:11AM

On Wednesday, Cracker Barrel Old Country Store (NASDAQ:CBRL) will release its quarterly report, and many believe that the hybrid restaurant/retail stock will keep its earnings growth at impressive levels. Given mixed performance from restaurant peers Darden Restaurants (NYSE:DRI) and Buffalo Wild Wings (NASDAQ:BWLD), Cracker Barrel has to make sure that it can outperform its rivals to hold activist investors at bay.

Cracker Barrel has an unusual business model. Unlike Darden, Buffalo Wild Wings, and most other restaurant chains, Cracker Barrel spends a lot of effort on gift shops connected to its dining establishments, seeking to supplement its income from travel-weary customers looking to take a longer break from their trips. Will that strategy successfully produce growth, or are critics right to believe that Cracker Barrel could do better by focusing more on its restaurant business? Let's take an early look at what's been happening with Cracker Barrel Old Country Store over the past quarter and what we're likely to see in its report.


Stats on Cracker Barrel Old Country Store

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$642.87 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

What's next for Cracker Barrel earnings?
In recent months, analysts have downgraded their views on Cracker Barrel earnings, cutting almost 5% from their April-quarter estimates and reducing full-year fiscal 2015 projections by about 3%. The stock has held its own, though, rising 2% since late February.

Cracker Barrel's previous quarterly results showed some of the headwinds that have hit the restaurant industry lately. Tough winter weather reduced the amount of travel people were willing to do, and that hit Cracker Barrel's results. Same-store sales fell 0.6% on the restaurant side of the business and 3% for retail. Yet the company kept its full-year earnings guidance unchanged and still expects comps for the year to come in between 1% and 2% higher.


One interesting move that Cracker Barrel has made recently is to revamp its menu. That's something that competitors have done in the past with mixed success, but for Cracker Barrel, the move is important in order to fight the perception that health-conscious diners won't find food they want at Cracker Barrel locations. So far, it appears that the impact has been neutral to positive, proving the benefit of seeking to expand Cracker Barrel's audience.

Still, perhaps the biggest news for Cracker Barrel came from investors. For a long time, activist investor Sardar Biglari has wanted Cracker Barrel to pay a huge special dividend and even sell the restaurant chain entirely. But apart from Biglari himself, more than 90% of shareholders voted against his most recent proxy-vote proposals, marking the fourth straight time that investors have chosen not to follow the activist-investor path and instead having confidence in Cracker Barrel management.

In the Cracker Barrel earnings report, watch to see how continuing poor weather affects the company going forward. The real key is whether Cracker Barrel sees the current quarter as improving, because now that winter's over, it won't be an excuse that Cracker Barrel can use to justify poor results from here on out.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Click here to add Cracker Barrel Old Country Store to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information