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Category: Stock Market and Cracker Barrel
Date: 26 November 2019 Stock Price: $151.87 We take a look at the 1st quarter earnings release of their 2020 fiscal year of old style country stores and restaurants owner Cracker Barrel.
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About Cracker Barrel Old Country Store
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL), established in 1969 in Lebanon, Tenn., 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
The image below shows a store front of Cracker Barrel in California as obtained from their website.
The image below shows a store front of Cracker Barrel in California as obtained from their website.
Cracker Barrel store front in California
Overview of Cracker Barrel's 1st quarter 2020 earnings report
The data below refers to the latest quarterly data unless specified otherwise:
- Total revenue: $749.040 million (down from $733.543 million from the same quarter of the previous year)
- Revenues increased by 2% over the last 12 months
- Cost of Goods sold: $219.814 million (up from $222.294 million for the same quarter of the previous year)
- Cost of goods sold decreased by -1% over the last 12 months
- Net income: $43.223 million down 8% from $47.207 million for the same quarter of the previous year)
- Diluted earnings per share: $1.79 (down 9% from $1.96 for the same quarter of the previous year)
- Dividend for the fiscal year: $1.30
- Dividend yield of Cracker Barrel: 2.4%
- Diluted weighted-average shares outstanding: 24.103 million (up from 24.073 million for the same quarter of the previous year)
- Cash and cash equivalents: $43.209 million
- Cash and cash equivalents per share: $1.79
- Cash and cash equivalents makes up 1.19% of Cracker Barrel's market capital
- Cash and cash equivalents makes up 2.02% of Cracker Barrel's total assets
- Receivables: $22.104 million
- Receivables makes up 1.03% of Cracker Barrel's total assets
- Inventories: $188.719 million
- Inventories makes up 8.8% of Cracker Barrel's total assets
- Stockholders equity in Cracker Barrel: $605.784 million
- Stockholders equity per share: $25.13
- Cracker Barrel's is trading at 6 times its stockholders equity per share which is well above the expected 2 to 4 times that most firms tend to trade at
- Cash generated from operations for 1st quarter 2020: $44.835 million
- Cash generated from operations per share for 1st quarter 2020: $1.86
Cracker Barrel's management commentary on their 1st quarter 2020 earnings and guidance
LEBANON, Tenn., Nov. 26, 2019 /PRNewswire/ -- Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported its financial results for the first quarter ended November 1, 2019.
First Quarter Fiscal 2020 Highlights
First Quarter Fiscal 2020 Highlights
- Comparable store restaurant sales growth of 2.1% and traffic of -1.5% outperformed the casual dining industry.
- As previously announced, the Company acquired Maple Street Biscuit Company in an all-cash transaction for $36 million.
- The Company repurchased $14.2 million in shares in the first quarter.
- GAAP earnings per diluted share were $1.79 compared to prior year first quarter earnings per diluted share of $1.96. This figure includes unfavorable impacts to earnings per diluted share for the quarter of ($0.11) related to transactional and integration expenses associated with the acquisition of Maple Street Biscuit Company and ($0.25) from the Company's equity method investment in its unconsolidated subsidiary Punch Bowl Social.
- The Company's Board of Directors declared a quarterly dividend of $1.30 per share on the Company's common stock, payable on February 5, 2020 to shareholders of record on January 17, 2020.
Share Repurchases
The Company repurchased $14.2 million in shares in the first quarter.
Quarterly Dividend Declared
The Company's Board of Directors declared a quarterly dividend to common shareholders of $1.30 per share, payable on February 5, 2020 to shareholders of record on January 17, 2020.
Fiscal 2020 Outlook
The Company provided the following updated outlook for fiscal 2020:
The Company repurchased $14.2 million in shares in the first quarter.
Quarterly Dividend Declared
The Company's Board of Directors declared a quarterly dividend to common shareholders of $1.30 per share, payable on February 5, 2020 to shareholders of record on January 17, 2020.
Fiscal 2020 Outlook
The Company provided the following updated outlook for fiscal 2020:
- GAAP earnings per diluted share between $8.50 and $8.65
- This includes an expected loss from the Company's equity method investment in its unconsolidated subsidiary, Punch Bowl Social, resulting in an unfavorable GAAP earnings per diluted share impact of approximately ($0.80). This estimate includes expenses related to growth such as pre-opening expenses, the expected impact from unit closure expenses, and updated business performance expectations.
- This also includes transactional and integration expenses related to the Company's acquisition of Maple Street Biscuit Company, which are expected to result in an unfavorable impact to GAAP earnings per diluted share of approximately ($0.15).
- Total revenue of $3.15 billion to $3.20 billion
- Cracker Barrel comparable store restaurant sales growth of approximately 2.0%
- Cracker Barrel comparable store retail sales growth of approximately 1.0%
- Operating income margin of approximately 9.0% as a percent of total revenue
- Depreciation expense of $110 million to $115 million
- Capital expenditures of $115 million to $125 million
- Net interest expense of approximately $12 million, which includes the benefit of interest income resulting from the Company's lending to Punch Bowl Social
- An effective tax rate of between 16.0% and 17.0%, which assumes a renewal of the Work Opportunity Tax Credit and includes an expected tax benefit from the projected loss from the Company's equity method investment in Punch Bowl Social
Cracker Barrel Old Country Store (NASDAQ:CBRL) stock price history
The image below, obtained from Google, shows the stock price history of Cracker Barrel (NASDAQ: CBRL) for the last 5 years. And its been a very good time for Cracker Barrel stockholders. 5 years ago the stock was trading at around $128 and its currently trading at $151.87 That's a strong return of 60.7% return provided to Cracker Barrel investors over the last 5 years. The stock is trading at close to the midpoint of its 52 week low and 52 week high, which shows the shorter term sentiment and momentum of the stock is neutral
Cracker Barrel (NASDAQ: CBRL) stock price history over the last 5 years.
Recent coverage of Cracker Barrel
The extract below covers the latest regarding Cracker Barrel as obtained from TheStreet.com
LEBANON, Tenn., Nov. 4, 2019 /PRNewswire/ -- For 50 years now, on every Thanksgiving, Cracker Barrel Old Country Store® has invited guests to gather around its table so they can spend less time in the kitchen and more time together with their loved ones. Since the first Cracker Barrel store was opened in 1969, every Cracker Barrel store has been open on Thanksgiving. Today, that legacy of welcoming guests home to a simpler time and place on this special holiday continues, as Thanksgiving is the busiest day for the iconic destination known for Southern homestyle cooking, warm hospitality, and unique retail offerings.
LEBANON, Tenn., Nov. 4, 2019 /PRNewswire/ -- For 50 years now, on every Thanksgiving, Cracker Barrel Old Country Store® has invited guests to gather around its table so they can spend less time in the kitchen and more time together with their loved ones. Since the first Cracker Barrel store was opened in 1969, every Cracker Barrel store has been open on Thanksgiving. Today, that legacy of welcoming guests home to a simpler time and place on this special holiday continues, as Thanksgiving is the busiest day for the iconic destination known for Southern homestyle cooking, warm hospitality, and unique retail offerings.
Cracker Barrel restaurant with outdoor seating
Cracker Barrel (NASDAQ: CBRL) latest stock valuation
So based on the 1st quarter 2020 earnings report of Cracker Barrel (NASDAQ: CBRL) and what do we value Cracker Barrel (CBRL) stock at? Based on the earnings reported and the fiscal guidance provided our valuation model provides a target (full value) price for Cracker Barrel at $158.90 a stock (down slightly from our 4th quarter 2019 earnings report valuation of Cracker Barrel).
We therefore believe that Cracker Barrel is slightly undervalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price / full value price which in this case is $158.90. So a good entry point into Cracker Barrel would be around $143. We expect the stock of Cracker Barrel to tick up slightly in coming weeks and months to levels closer to our target (full value) price.
We therefore believe that Cracker Barrel is slightly undervalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price / full value price which in this case is $158.90. So a good entry point into Cracker Barrel would be around $143. We expect the stock of Cracker Barrel to tick up slightly in coming weeks and months to levels closer to our target (full value) price.