Of all of the reported numbers, however, one of the main ones to focus on is same-store sales growth, which clocked in at a measly 2% over Q3 of last year. For restaurant operators and retailers alike, the growth in sales after subtracting out the boost from recently opened shops is a key measurement.
The main reason is that CBRL has to dish out quite a bit of cash to open these restaurants, and the return on investment is vital. The company can fund this expansion with either owner earnings, which is cash that could otherwise be returned to shareholders, or debt. Either way, the projects need to meet certain rate of return requirements.
If, over time, the average sales growth on each of these units barely keeps up with inflation, then the money invested to build them isn't getting as good of a return. And neither will shareholders.
Now, in fairness to Cracker Barrel, other big players in the industry aren't putting up huge gains either.
For the month of April, Outback Steakhouse
So at least CBRL isn't alone in its uninspiring performance. But what's holding the company and industry back? Well, there could be plenty of factors, but investors seem to be focused on two: competition and crude. Competition refers to the weed-like quality of new restaurant openings; they just don't stop springing up. And crude refers to, you guessed it, gas prices -- and this certainly doesn't help CBRL's interstate locations.
With this one-two combo, it will be interesting to see how much CBRL is able to grow shareholder value in the coming years. Traffic has dipped before for the company, and so far, it usually ends up back on track within a year or so. If this happens, and management can achieve solid margins, it would be in a much better position to create shareholder value.
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Fool contributor Matt Thurmond, despite being a big fan of Logan's Roadhouse, owns no shares in any company mentioned in this article.