On Friday, BofA Securities adjusted its outlook on Cracker Barrel (NASDAQ:CBRL), increasing the price target to $45.00 from the previous $42.00. The firm maintains an Underperform rating on the stock. The change follows Cracker Barrel's preliminary first-quarter results, which were released ahead of their official December 4 reporting date.
The restaurant chain reported a first-quarter same-store sales growth (SSSG) of 2.9% in its restaurant segment, surpassing the BofA and Visible Alpha consensus of 1.6% and 1.2%, respectively. Additionally, Cracker Barrel's retail segment performed slightly better than expected, with a SSSG of -1.6% compared to the consensus estimates of 0.0% and -2.0%.
The analyst noted that Cracker Barrel's first-quarter restaurant SSSG and traffic outperformed the Black Box Casual Dining Index. This is attributed to Cracker Barrel's higher relative market share compared to other chains included in the index. Market expectations for the first quarter may have also been influenced by month-over-month improvements in September, as indicated by Bloomberg Second Measure credit and debit card data.
Cracker Barrel's adjusted EBITDA for the first quarter was reported at $45.8 million, which is above the consensus of $46.6 million from BofA and $43.8 million from Visible Alpha. The earnings per share (EPS) for the quarter also exceeded expectations, coming in at $0.45 compared to the anticipated $0.50 from BofA and $0.36 from Visible Alpha. These results suggest that the company has performed favorably against market predictions.
In other recent news, Cracker Barrel Old Country Store, Inc. faced criticism from major shareholder Biglari Capital Corp. over its recent financial performance and strategic decisions. The investment firm, which owns a 9.3% stake in Cracker Barrel, called for significant changes, including a halt to new store openings and a focus on improving store-level economics.
In response, Cracker Barrel's board urged shareholders to support its recommended slate of nominees and reject Biglari's proposals at the upcoming Annual Meeting of Shareholders. The board emphasized the importance of maintaining its ongoing strategic transformation plan, aimed at delivering sustainable value.
The company's fiscal 2024 fourth-quarter earnings report revealed a total revenue of $894.4 million, a 6.9% increase from the previous year. However, the adjusted EBITDA decreased to $57.4 million, and the earnings per share fell short of both Loop Capital's estimate of $1.12 and the consensus estimate of $1.10.
Despite these results, both Truist Securities and Loop Capital maintained their Hold rating on Cracker Barrel's shares. The company's fiscal 2025 plans include 25 to 30 store remodels and the opening of new Cracker Barrel and Maple Street locations, projecting a revenue of $3.4 billion to $3.5 billion for the upcoming fiscal year. These are the recent developments for the company.
InvestingPro Insights
Cracker Barrel's recent performance, as highlighted in the article, is reflected in some of the latest InvestingPro data and tips. The company's market cap stands at $1.07 billion, with a P/E ratio of 26.1, indicating investor expectations for future growth. An InvestingPro Tip notes that Cracker Barrel has maintained dividend payments for 43 consecutive years, underscoring its commitment to shareholder returns despite recent challenges.
The company's revenue for the last twelve months reached $3.47 billion, with a modest growth of 0.81%. This aligns with the article's mention of positive same-store sales growth in the restaurant segment. However, an InvestingPro Tip cautions that 5 analysts have revised their earnings downwards for the upcoming period, which investors should consider alongside the recent positive quarterly results.
Cracker Barrel's stock has shown a strong return over the last three months, with a price total return of 19.08%, potentially reflecting the market's response to the better-than-expected preliminary first-quarter results discussed in the article. For those interested in a deeper analysis, InvestingPro offers 7 additional tips for Cracker Barrel, providing a more comprehensive view of the company's financial health and market position.
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