Cracker Barrel Reports Results for Third Quarter Fiscal 2013

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Cracker Barrel Reports Results for Third Quarter Fiscal 2013

Positive Comparable Store Traffic, Restaurant and Retail Sales in Quarter

Diluted EPS Increased 19% Compared with Adjusted EPS in Prior Year Quarter

Board Increases Quarterly Dividend by 50% to $0.75 per share

LEBANON, Tenn.--(BUSINESS WIRE)-- Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (NAS: CBRL) today reported financial results for the third quarter of fiscal 2013 ended May 3, 2013.

Third-Quarter Fiscal 2013 Highlights

  • Compared to the prior year third quarter, comparable store traffic increased 0.7%, comparable store restaurant sales increased 3.1%, and comparable store retail sales increased 5.5%.
  • Sixth consecutive quarter of positive comparable traffic, restaurant sales and retail sales, and outperformance of the Knapp-Track TM casual dining index.
  • Operating income margin was 6.9% of total revenue, compared with 6.4% in the prior year quarter. Adjusted for organizational restructuring expenses, operating income margin in the prior year quarter was 6.7%. (See non-GAAP reconciliation below.)
  • Earnings per diluted share were $1.02, compared to $0.81 in the prior year quarter. Adjusted earnings per diluted share in the prior year quarter were $0.86. (See non-GAAP reconciliation below.)
  • Board approves quarterly dividend increase of 50% to $0.75 per share. Since November 2011, the Company has tripled its quarterly dividend.
  • The Company raises its guidance range for fiscal 2013 adjusted earnings per diluted share to $4.75 to $4.85.

"Driven by strong sales, traffic and operational performance, our earnings growth for the third quarter exceeded our expectations," said Sandra B. Cochran, President and Chief Executive Officer of Cracker Barrel Old Country Store, Inc. "We believe focusing on our priorities around menu initiatives, store merchandise, marketing and operations improved our operating margin and profitability during the quarter. Our diluted earnings per share grew by 19% over the prior year. This performance enabled us to further enhance shareholder value by increasing our quarterly dividend by 50%, while we reduced our debt by $125 million. We remain encouraged by our results and look to build on our successes in the fourth quarter and into the next fiscal year."

Third-Quarter Fiscal 2013 Results


The Company reported total revenue of $640.4 million for the third quarter of fiscal 2013, representing an increase of 5.2% over the third quarter of the prior year. Comparable store restaurant sales increased 3.1%, including a 2.4% increase in average check. The average menu price increase for the quarter was approximately 2.3%. Comparable store retail sales were up 5.5% for the quarter. The Company estimates that inclement weather in the third quarter reduced comparable store traffic, restaurant and retail sales by approximately 0.3%. The Company opened one new Cracker Barrel store during the quarter, for a total of six new store openings year-to-date.

Comparable store restaurant traffic, average check and comparable store restaurant and retail sales for the fiscal months of February, March and April were as follows:











Comparable restaurant traffic             -1.9%             4.2%             -0.1%             0.7%
Average check             2.5%             2.6%             2.1%             2.4%
Comparable restaurant sales             0.6%             6.8%             2.0%             3.1%
Comparable retail sales             5.2%             13.7%             -0.5%             5.5%

Fiscal 2012 was a 53-week year. For Fiscal 2013, the Company calculates comparable store traffic, check and sales using the corresponding prior year weeks.

Operating Income

Operating income was $44.2 million, or 6.9% of total revenue, in the third quarter of fiscal 2013 compared with $39.1 million, or 6.4% of total revenue, in the third quarter of the prior year. Adjusted for restructuring expenses, operating income in the third quarter of the prior year was $40.8 million, or 6.7% of total revenue. Lower hourly labor expense as a percent of total revenue contributed significantly to the operating income margin improvement.

Dividend Increase and Debt Repayment

The Board of Directors recently increased the quarterly dividend to $0.75 per share on the Company's common stock, payable on August 5, 2013 to shareholders of record as of July 19, 2013. This represents a 50% increase over the Company's last quarterly dividend of $0.50.

The Company's 2006 interest rate swap expired at the end of the third quarter and the Company paid down $125 million of long-term debt. The Company expects the lower debt balance and lower interest rates will reduce its annual interest expense by approximately $25 million, or approximately $0.70 per diluted share, and expects to recognize $0.17 per diluted share of this year-over-year benefit during the fourth quarter of 2013.

Fiscal 2013 Outlook

Based upon year-to-date financial performance, recent trends and current estimates, the Company raised its full-year guidance for fiscal 2013. The Company expects total revenue of between $2.6 billion and $2.65 billion and adjusted earnings per diluted share of between $4.75 and $4.85. The revenue projection for fiscal 2013 reflects the expected opening of eight new Cracker Barrel stores and projected increases in comparable store restaurant and retail sales in a range of 2.5% to 3.0%. The Company projects commodity inflation of between 3.5% and 4.0% and an adjusted operating income margin of between 7.4% and 7.6% of total revenue for fiscal 2013. The Company expects capital expenditures of between $75 million and $80 million. The Company reminds investors that its outlook for fiscal 2013 reflects a number of assumptions, many of which are outside the Company's control.

Fiscal 2013 Third-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 on June 3, 2013, beginning at 11:00 a.m. (Eastern Time). An on-line replay will be available at 2:00 p.m. (Eastern Time) and continue through June 17, 2013.

About Cracker Barrel

Cracker Barrel Old Country Store provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real home-style food and shopping that's surprisingly unique, genuinely fun and reminiscent of America's country heritage...all at a fair price. The restaurants serve up delicious, home-style country food such as meatloaf and homemade chicken n' dumplins as well as our signature biscuits using an old family recipe. The authentic old country retail store is fun to shop and offers unique gifts and self-indulgences.

Cracker Barrel Old Country Store, Inc.  (NAS: CBRL) was established in 1969 in Lebanon, Tenn. and operates 622 company-owned locations in 42 states. Every Cracker Barrel store is open seven days a week with hours Sunday through Thursday, 6 a.m. - 10 p.m., and Friday and Saturday, 6 a.m. - 11 p.m. For more information, visit:


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 Q3FY13 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," "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, weather on sales and customer travel, and discretionary income or personal expenditure activity of our customers; our ability to identify, acquire and sell successful new lines of retail merchandise and new menu items at our restaurants; our ability to successfully implement or sustain plans intended to improve operational or marketing execution and performance; 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; our ability to successfully implement 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 substantial 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; the availability and cost of suitable sites for restaurant development and our ability to identify those sites; 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; 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.

(In thousands, except share and per share amounts, percentages and ratios)
Third Quarter Ended Nine Months Ended
Percentage Percentage


4/27/12 Change


4/27/12 Change
Total revenue $ 640,407 $ 608,514 5 % $ 1,970,529 $ 1,880,185 5 %
Cost of goods sold   201,982   189,615 7   644,027   611,313 5
Gross profit 438,425 418,899 5 1,326,502 1,268,872 5
Labor and other related expenses 241,864 235,275 3 719,474 691,176 4
Other store operating expenses   116,408   109,947 6   354,859   338,127 5
Store operating income 80,153 73,677 9 252,169 239,569 5
General and administrative expenses   35,981   34,569 4   105,492   108,500



Operating income 44,172 39,108 13 146,677 131,069 12
Interest expense   10,194   11,173



  31,199   33,333



Pretax income 33,978 27,935 22 115,478 97,736 18
Provision for income taxes   9,376   8,961 5   32,516   29,351 11
Net income $ 24,602 $ 18,974 30 $ 82,962 $ 68,385 21
Earnings per share - Basic: $






27 $






Earnings per share - Diluted: $






26 $






Weighted average shares:
Basic 23,760,589 23,132,730 3 23,683,133 22,990,544 3
Diluted 24,006,821 23,535,765 2 23,913,226 23,329,230 3

Ratio Analysis

Total revenue:
Restaurant 81 .6% 82 .2% 78 .9% 79 .0%
Retail   18 .4   17 .8   21 .1   21


Total revenue 100








Cost of goods sold   31 .5   31 .2   32 .7   32 .5
Gross profit 68 .5 68 .8 67 .3 67 .5
Labor and other related expenses 37 .8 38 .6 36 .5 36 .8
Other store operating expenses   18 .2   18 .1   18




Store operating income 12 .5 12 .1 12 .8 12 .7
General and administrative expenses   5 .6   5 .7   5 .4   5 .7
Operating income 6 .9 6 .4 7 .4 7


Interest expense   1 .6
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