On Friday, Truist Securities adjusted its price target for shares of Cracker Barrel (NASDAQ:CBRL) Old Country Store, Inc. (NASDAQ:CBRL), increasing it to $44.00, up from the previous target of $42.00. The firm maintained its Hold rating on the stock.
The revision follows Cracker Barrel's fourth-quarter fiscal year 2024 results, which saw both same-store sales (SSS) and earnings per share (EPS) fall short of expectations. However, the company provided a fiscal year 2025 guidance that was slightly more optimistic than anticipated.
Truist Securities' updated analysis reflects a modest uptick in estimated figures and the new price target. This reassessment comes in light of recent sales data that appears to align with improving industry trends. Cracker Barrel's sales are expected to benefit from bold menu pricing strategies, which are anticipated to bolster sales beyond initial projections.
The restaurant chain has also introduced a less costly option for its remodeling plans, which is projected to substantially reduce the company's capital expenditures over the coming years. This "refresh" remodel design aims to update Cracker Barrel's aesthetic while managing costs more effectively.
Despite these positive developments, Truist Securities anticipates that customer traffic to Cracker Barrel may continue to face challenges. The expectation is that traffic will remain subdued until there is a noticeable uptick in spending among lower-income consumers. The firm noted that the timeline for such an improvement is highly uncertain, suggesting potential ongoing pressure on the restaurant's performance in this area.
In other recent news, Cracker Barrel Old Country Store, Inc. reported a total revenue of $894.4 million in its fiscal 2024 fourth-quarter earnings, marking a 6.9% increase from the previous year. The company also noted a decrease in adjusted EBITDA to $57.4 million. These developments are part of a year of strategic transformation and operational improvements for the company.
In addition to these financial results, Cracker Barrel has announced plans for fiscal 2025, which include 25 to 30 store remodels and the opening of new Cracker Barrel and Maple Street locations. The company projects a revenue of $3.4 billion to $3.5 billion for the upcoming fiscal year.
Cracker Barrel's Rewards loyalty program has reached 6 million members, which has contributed to increased engagement and sales. However, retail sales saw a 4.2% decrease, and comparable store restaurant sales slightly rose by 0.4%. These are some of the recent developments for the company as it looks ahead to the next fiscal year.
InvestingPro Insights
Truist Securities' recent price target adjustment for Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) coincides with key financial metrics and market performance data. According to real-time data from InvestingPro, Cracker Barrel has a market capitalization of $912.77 million and a P/E ratio standing at 22.71, which adjusts to a more attractive 11.03 when looking at the last twelve months as of Q3 2024. Despite a slight decline in revenue growth over the same period, the company's gross profit margin remains strong at 32.19%.
InvestingPro Tips highlight Cracker Barrel's high shareholder yield and a commendable track record of maintaining dividend payments for 43 consecutive years. These factors could be appealing to investors looking for stable dividend income. However, it is important to note that the company's short-term obligations currently exceed its liquid assets, indicating potential liquidity concerns. On a positive note, analysts predict the company will remain profitable this year, aligning with the optimism reflected in the company's fiscal year 2025 guidance.
For those interested in a deeper dive into Cracker Barrel's financial health and future prospects, InvestingPro offers additional tips and insights. There are currently 5 more InvestingPro Tips available at: https://www.investing.com/pro/CBRL, which could provide investors with a more comprehensive understanding of the company's position and potential investment opportunities.
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