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Cracker Barrel's (NASDAQ:CBRL) Q1 Earnings Results: Revenue In Line With Expectations


Jabin Bastian /
2024/05/30 8:08 am EDT

Restaurant company Cracker Barrel (NASDAQ:CBRL) reported results in line with analysts' expectations in Q1 CY2024, with revenue down 1.9% year on year to $817.1 million. The company's outlook for the full year was also close to analysts' estimates with revenue guided to $3.49 billion at the midpoint. It made a non-GAAP profit of $0.88 per share, down from its profit of $1.21 per share in the same quarter last year.

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Cracker Barrel (CBRL) Q1 CY2024 Highlights:

  • Revenue: $817.1 million vs analyst estimates of $820.6 million (small miss)
  • EPS (non-GAAP): $0.88 vs analyst estimates of $0.66 (33.3% beat)
  • The company dropped its revenue guidance for the full year from $3.55 billion to $3.49 billion at the midpoint, a 1.7% decrease
  • Gross Margin (GAAP): 32.2%, down from 32.7% in the same quarter last year
  • Free Cash Flow of $8.58 million, down 83.3% from the previous quarter
  • Locations: 721 at quarter end, in line with the same quarter last year
  • Same-Store Sales fell 1.5% year on year (miss vs. expectations of down 1.0% year on year)
  • Market Capitalization: $1.01 billion

Commenting on the third quarter results, Cracker Barrel President and Chief Executive Officer Julie Masino said, "As we indicated in our recent business update call, our third quarter results came in below expectations due to softer traffic than we originally anticipated, which underscores the importance of executing our strategic transformation. Our teams are fully committed to bringing these plans to life while continuing to deliver an exceptional guest experience and managing our business every shift, every day. "

Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ:CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.

Sit-Down Dining

Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.

Sales Growth

Cracker Barrel is one of the larger restaurant chains in the industry and benefits from a strong brand, giving it customer mindshare and influence over purchasing decisions.

As you can see below, the company's annualized revenue growth rate of 2% over the last five years was weak , but to its credit, it opened new restaurants and grew sales at existing, established dining locations.

Cracker Barrel Total Revenue

This quarter, Cracker Barrel missed Wall Street's estimates and reported a rather uninspiring 1.9% year-on-year revenue decline, generating $817.1 million in revenue. Looking ahead, Wall Street expects sales to grow 2.4% over the next 12 months, an acceleration from this quarter.

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Same-Store Sales

Same-store sales growth is a key performance indicator used to measure organic growth and demand for restaurants.

Cracker Barrel's demand within its existing restaurants has generally risen over the last two years but lagged behind the broader sector. On average, the company's same-store sales have grown by 3.8% year on year. With positive same-store sales growth amid an increasing number of restaurants, Cracker Barrel is reaching more diners and growing sales.

Cracker Barrel Year On Year Same Store Sales Growth

In the latest quarter, Cracker Barrel's same-store sales fell 1.5% year on year. This decline was a reversal from the 7.4% year-on-year increase it posted 12 months ago. We'll be keeping a close eye on the company to see if this turns into a longer-term trend.

Key Takeaways from Cracker Barrel's Q1 Results

We were impressed by how significantly Cracker Barrel blew past analysts' gross margin expectations this quarter. We were also excited its EPS outperformed Wall Street's estimates. On the other hand, its revenue unfortunately missed analysts' expectations. Overall, we think this was a mixed quarter. The stock is up 2.1% after reporting and currently trades at $46.26 per share.

Cracker Barrel may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.