Cracker Barrel Is On, but Issues Loomhttp://www.fool.com/investing/general/2013/09/20/cracker-barrel-ls-on-but-issues-loom.aspx Michael Lewis
September 20, 2013
For Cracker Barrel Old Country Store (NASDAQ: CBRL), the recent earnings release was one of beats and misses. For the just-ended quarter, the company was able to deliver top-line results right around analyst consensus, while its bottom line beat significantly. However, looking ahead to the first quarter of the new fiscal year, Cracker Barrel was unable to satisfy the Street's desires, causing shares to trend down a little less than 3%. The ongoing story here involves 20% stakeholder and uber-activist Sardar Biglari, whose Biglari Holdings (NYSE: BH) has been all over management for years in an attempt to improve capital allocation practices. Here's the latest.
For the seventh consecutive quarter, the interstate icon boosted both its restaurant same-store sales and retail same-store sales, up 2.6% and 1.1%, respectively.
Wall Street had been expecting $0.08 under the actual results.
Looking ahead, Cracker Barrel expects $2.7 billion-$2.75 billion in sales, with diluted earnings per share of $5.60-$5.80. Same-store sales are projected to grow between 2% and 3%, while the company drives top-line sales by opening seven to eight new stores. Management exercised some of its buyback, repurchasing $3.6 million worth of stock. It also paid back more than $125 million in debt.
Overall, the report was relatively strong, especially considering a weak consumer-spending environment, but one major investor remains extremely displeased.
Biglari, whose firm has repeatedly attempted to gain board seats (unsuccessfully) and was offered a "go away" share buyout from Cracker Barrel management (also unsuccessful), believes the company is spending money on three areas that are detrimental to shareholders in the long run.