Attached files
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| 8-K - 8-K - CRACKER BARREL OLD COUNTRY STORE, INC | d146339d8k.htm |
Exhibit 99.1
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| Investor Contact: | Lawrence E. Hyatt | |
| (615) 235-4432 | ||
| Media Contact: | Janella Escobar | |
| (615) 235-4618 | ||
CRACKER BARREL REPORTS RESULTS FOR FIRST QUARTER FISCAL 2016
Diluted Earnings per Share Increased 20% over EPS in the Prior Year Quarter
Company Reaffirms Full Year Earnings Guidance
LEBANON, Tenn. – November 24, 2015 – Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”) (Nasdaq: CBRL) today reported financial results for the first quarter of fiscal 2016 ended October 30, 2015.
First Quarter Fiscal 2016 Highlights
| • | Compared to the prior year first quarter, comparable store restaurant sales increased 2.5% and comparable store retail sales increased 2.4%. |
| • | Operating income margin was 9.3% of total revenue, compared to 8.1% in the prior year quarter. |
| • | Earnings per diluted share were $1.70, a 19.7% increase compared to EPS of $1.42 in the prior year quarter. |
Commenting on the first quarter results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, “Thanks to the continued success of our cost reduction initiatives, we were able to deliver strong EPS growth for our shareholders in the first quarter. Nevertheless, we believe consumer spending was challenged during the quarter, particularly in October, and that this was reflected in our comparable store traffic and sales. Even in this challenging environment, we believe we have the right menu, marketing, and margin-driving initiatives in place to achieve continued success in fiscal 2016.”
First Quarter Fiscal 2016 Results
Revenue
The Company reported total revenue of $702.6 million for the first quarter of fiscal 2016, representing an increase of 2.8% over the first quarter of the prior year. Comparable store restaurant sales increased 2.5%, as a 3.2% increase in average check was partially offset by a 0.7% reduction in traffic. The average menu price increase for the quarter was approximately 2.8%. Comparable store retail sales increased 2.4% for the quarter.
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Cracker Barrel Reports First Quarter Results
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November 24, 2015
Comparable store restaurant traffic, average check and comparable store restaurant and retail sales for the fiscal months of August, September and October and for the first quarter were as follows:
| AUGUST | SEPTEMBER | OCTOBER | FIRST QUARTER | |||||||||||||
| Comparable restaurant traffic |
0.1 | % | 0.4 | % | -2.1 | % | -0.7 | % | ||||||||
| Average check |
2.6 | % | 3.6 | % | 3.3 | % | 3.2 | % | ||||||||
| Comparable restaurant sales |
2.7 | % | 4.0 | % | 1.2 | % | 2.5 | % | ||||||||
| Comparable retail sales |
-1.2 | % | 1.5 | % | 5.6 | % | 2.4 | % | ||||||||
Operating Income
Operating income was $65.3 million, or 9.3% of total revenue, in the first quarter of fiscal 2016 compared with $55.4 million, or 8.1% of total revenue, in the first quarter of fiscal 2015. As a percentage of total revenue, reductions in cost of goods sold and labor and related expenses were partially offset by an increase in other store operating expenses.
Diluted Earnings per Share
Earnings per diluted share in the first quarter of fiscal 2016 were $1.70, compared to earnings per diluted share of $1.42 in the prior year quarter, an increase of 19.7%.
Fiscal 2016 Outlook
The Company reaffirmed its previous earnings guidance and expects to report earnings per diluted share for the 2016 fiscal year between $7.15 and $7.30. The Company expects to report increases in comparable store restaurant sales and comparable store retail sales in the range of 2.0% to 3.0%. The Company expects total revenue of between $2.90 billion and $2.95 billion, reflecting the expected opening of seven new Cracker Barrel stores during the fiscal year. The Company projects food commodity inflation in the range of 2.5% to 3.0% for the fiscal year, driven largely by expected increases in egg prices. The Company projects an operating income margin of between 9.0% and 9.5% of total revenue for fiscal 2016. The Company expects depreciation expense between $76 million and $77 million; net interest expense between $14 million and $15 million; and capital expenditures of approximately $110 million. The Company expects an effective tax rate for fiscal 2016 of between 31% and 32%.
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Cracker Barrel Reports First Quarter Results
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November 24, 2015
The Company expects to report earnings per diluted share for the second quarter of 2016 of between $1.80 and $1.90. The Company reminds investors that its outlook for fiscal 2016 reflects a number of assumptions, many of which are outside the Company’s control.
Fiscal 2016 First Quarter Conference Call
As previously announced, the live broadcast of Cracker Barrel’s quarterly conference call will be available to the public online at investor.crackerbarrel.com on November 24, 2015, beginning at 11:00 a.m. (Eastern Time). An online replay will be available at 2:00 p.m. (Eastern Time) and continue through December 8, 2015.
About Cracker Barrel Old Country Store®
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. (Nasdaq: CBRL) was established in 1969 in Lebanon, Tenn. and operates 635 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: crackerbarrel.com.
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 Q1 FY 2016 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,” “regular,” “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
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Cracker Barrel Reports First Quarter Results
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November 24, 2015
limited to: the effects of uncertain consumer confidence, higher costs for energy, general or regional economic weakness, weather on sales and customer travel, 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 sustain or the effects of 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; the effects of 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; our ability to retain key personnel; 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 (“GAAP”); 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.
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Cracker Barrel Reports First Quarter Results
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November 24, 2015
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
(In thousands, except share and per share amounts, percentages and ratios)
| First Quarter Ended | ||||||||||||
| Percentage | ||||||||||||
| 10/30/2015 | 10/31/2014 | Change | ||||||||||
| Total revenue |
$ | 702,629 | $ | 683,428 | 3 | % | ||||||
| Cost of goods sold, exclusive of depreciation and rent |
222,973 | 222,295 | 0 | |||||||||
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| Labor and other related expenses |
244,322 | 242,327 | 1 | |||||||||
| Other store operating expenses |
135,707 | 130,172 | 4 | |||||||||
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| Store operating income |
99,627 | 88,634 | 12 | |||||||||
| General and administrative expenses |
34,319 | 33,192 | 3 | |||||||||
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| Operating income |
65,308 | 55,442 | 18 | |||||||||
| Interest expense |
3,544 | 4,424 | (20 | ) | ||||||||
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| Pretax income |
61,764 | 51,018 | 21 | |||||||||
| Provision for income taxes |
20,899 | 16,994 | 23 | |||||||||
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| Net income |
$ | 40,865 | $ | 34,024 | 20 | |||||||
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| Earnings per share – Basic: |
$ | 1.71 | $ | 1.43 | 20 | |||||||
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| Earnings per share – Diluted: |
$ | 1.70 | $ | 1.42 | 20 | |||||||
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| Weighted average shares: |
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| Basic |
23,956,554 | 23,862,195 | 0 | |||||||||
| Diluted |
24,073,052 | 24,001,438 | 0 | |||||||||
| Ratio Analysis |
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| Total revenue: |
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| Restaurant |
80.0 | % | 80.0 | % | ||||||||
| Retail |
20.0 | 20.0 | ||||||||||
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| Total revenue |
100.0 | 100.0 | ||||||||||
| Cost of goods sold, exclusive of depreciation and rent |
31.7 | 32.5 | ||||||||||
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| Labor and other related expenses |
34.8 | 35.5 | ||||||||||
| Other store operating expenses |
19.3 | 19.0 | ||||||||||
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| Store operating income |
14.2 | 13.0 | ||||||||||
| General and administrative expenses |
4.9 | 4.9 | ||||||||||
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| Operating income |
9.3 | 8.1 | ||||||||||
| Interest expense |
0.5 | 0.6 | ||||||||||
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| Pretax income |
8.8 | 7.5 | ||||||||||
| Provision for income taxes |
3.0 | 2.5 | ||||||||||
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| Net income |
5.8 | % | 5.0 | % | ||||||||
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Cracker Barrel Reports First Quarter Results
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November 24, 2015
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share amounts)
| 10/30/2015 | 10/31/2014 | |||||||
| Assets |
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| Cash and cash equivalents |
$ | 127,540 | $ | 105,851 | ||||
| Accounts receivable |
18,070 | 15,672 | ||||||
| Inventory |
186,230 | 177,741 | ||||||
| Prepaid expenses |
18,107 | 16,603 | ||||||
| Deferred income taxes |
5,960 | 6,613 | ||||||
| Property and equipment, net |
1,049,597 | 1,041,206 | ||||||
| Other long-term assets |
63,686 | 60,341 | ||||||
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| Total assets |
$ | 1,469,190 | $ | 1,424,027 | ||||
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| Liabilities and Shareholders’ Equity |
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| Accounts payable |
$ | 113,268 | $ | 92,401 | ||||
| Other current liabilities |
230,453 | 237,931 | ||||||
| Long-term debt |
400,000 | 368,750 | ||||||
| Interest rate swap liability |
11,206 | 5,388 | ||||||
| Other long-term obligations |
132,607 | 124,365 | ||||||
| Deferred income taxes |
48,147 | 57,031 | ||||||
| Shareholders’ equity, net |
533,509 | 538,161 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 1,469,190 | $ | 1,424,027 | ||||
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| Common shares issued and outstanding |
23,929,609 | 23,905,172 | ||||||
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Cracker Barrel Reports First Quarter Results
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November 24, 2015
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited and in thousands)
| Three Months Ended | ||||||||
| 10/30/2015 | 10/31/2014 | |||||||
| Cash flows from operating activities: |
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| Net income |
$ | 40,865 | $ | 34,024 | ||||
| Depreciation and amortization |
18,687 | 17,511 | ||||||
| Loss on disposition of property and equipment |
1,425 | 2,170 | ||||||
| Share-based compensation, net of excess tax benefit |
32 | 772 | ||||||
| (Increase) in inventories |
(33,172 | ) | (12,315 | ) | ||||
| (Decrease) in accounts payable |
(19,849 | ) | (6,076 | ) | ||||
| Net changes in other assets and liabilities |
(12,343 | ) | 643 | |||||
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| Net cash (used in) provided by operating activities |
(4,355 | ) | 36,729 | |||||
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| Cash flows from investing activities: |
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| Purchase of property and equipment, net of insurance recoveries |
(17,016 | ) | (18,419 | ) | ||||
| Proceeds from sale of property and equipment |
45 | 1,007 | ||||||
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| Net cash (used in) investing activities |
(16,971 | ) | (17,412 | ) | ||||
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| Cash flows from financing activities: |
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| Net payments for credit facilities and other long-term obligations |
0 | (6,250 | ) | |||||
| (Taxes withheld) from exercise of share-based compensation awards, net |
(5,243 | ) | (4,719 | ) | ||||
| Excess tax benefit from share-based compensation |
1,920 | 1,963 | ||||||
| Purchases and retirement of common stock |
(14,653 | ) | 0 | |||||
| Dividends on common stock |
(98,613 | ) | (23,821 | ) | ||||
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| Net cash (used in) financing activities |
(116,589 | ) | (32,827 | ) | ||||
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| Net (decrease) in cash and cash equivalents |
(137,915 | ) | (13,510 | ) | ||||
| Cash and cash equivalents, beginning of period |
265,455 | 119,361 | ||||||
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| Cash and cash equivalents, end of period |
$ | 127,540 | $ | 105,851 | ||||
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Cracker Barrel Reports First Quarter Results
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November 24, 2015
CRACKER BARREL OLD COUNTRY STORE, INC.
Supplemental Information
(Unaudited)
| First Quarter Ended | ||||||||
| 10/30/2015 | 10/31/2014 | |||||||
| Units in operation: |
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| Open at beginning of period |
637 | 631 | ||||||
| (Closed) opened during period |
(2 | ) | 2 | |||||
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| Open at end of period |
635 | 633 | ||||||
| Total revenue: (In thousands) |
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| Restaurant |
$ | 562,279 | $ | 546,707 | ||||
| Retail |
140,350 | 136,721 | ||||||
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| Total revenue |
$ | 702,629 | $ | 683,428 | ||||
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| Cost of goods sold: (In thousands) |
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| Restaurant |
$ | 154,790 | $ | 153,418 | ||||
| Retail |
68,183 | 68,877 | ||||||
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| Total cost of goods sold |
$ | 222,973 | $ | 222,295 | ||||
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| Average unit volume: (In thousands) |
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| Restaurant |
$ | 883.2 | $ | 864.3 | ||||
| Retail |
220.5 | 216.2 | ||||||
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| Total |
$ | 1,103.7 | $ | 1,080.5 | ||||
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| Operating weeks: |
8,276 | 8,223 | ||||||
| Q1 2016 vs. Q1 2015 | ||||||||
| Comparable store sales period to period increase: |
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| Restaurant |
2.5 | % | ||||||
| Retail |
2.4 | % | ||||||
| Number of locations in comparable store base |
623 | |||||||
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