If old-timey Western style mixed with delicious food and a gift shop sounds like the American dream to you, then you may love Cracker Barrel Old Country Store
What is a cracker barrel, anyway?
What a fourth quarter for Cracker Barrel! The company reported a profit of $34.7 million, which translates to $1.47 a share. For a comparison, the company made $17.5 million, or $0.75 per share, during the same quarter last year; this means that Cracker Barrel nearly doubled its profit. It should also be noted that the $1.47 EPS crushed analyst estimates of $1.29. No wonder the stock is booming.
This wasn't the only good news for Cracker Barrel. The company's same-store sales on the restaurant side increased 3.8%, while same-store sales grew 3.1% in the retail division. The 2.4% increase in average check total didn't hurt at all and is one of the reasons Cracker Barrel's gross margin increased 0.7 percentage points.
Turns out "cracker barrel" means "characteristic of country life"
Let's see how the company stacks up against its competitors. For the largest cross-section of restaurant companies, I've included Cracker Barrel's most similar competitor, Denny's
Company |
P/E |
Quarterly Revenue Growth |
Operating Margin |
Dividend Yield |
---|---|---|---|---|
Cracker Barrel | 17.25 | 5% | 7% | 3.1% |
Denny's | 4.46 | (8%) | 11% | 0% |
McDonald's | 17.49 | 0 | 31% | 3% |
Chipotle | 41.50 | 21% | 17% | 0% |
Sources: Yahoo! Finance, WSJ, and Fool.com.
As good as this quarter may have been for Cracker Barrel, it still has a long way to go to beat its competition for investor appeal. A mid-range P/E that masks the low operating margin and even lower revenue growth doesn't do Cracker Barrel any favors. But the company may still win investor approval with its impressive dividend yield, which was increased by 25% in April. The yield, combined with a payout ratio of $0.50 per share, could be enough reason for income investors to take a closer look.
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