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Cracker Barrel offers earnings report

Jared Felkins • Dec 17, 2015 at 5:20 PM

Fiscal fourth-quarter earnings fell 1.1 percent for Cracker Barrel Old Country Store Inc., but the revenue decline was due to one less week of sales a year ago.

The Lebanon-based company released earnings information Wednesday morning prior to markets opening. For the current quarter, Cracker Barrel forecast per-share earnings of $1.05 to $1.15, below recent estimates of analysts polled Thompson Reuters for $1.32 a share.

Cracker Barrel pointed to higher commodity costs, as well as training and other expenses tied to the introduction of low-calorie foods.

Cracker Barrel forecast per-share earnings of $5.60 to $5.80 and revenue of $2.7 billion to $2.75 billion. Analysts polled by Thomson Reuters most recently expected per-share earnings of $5.69 and revenue of $2.74 billion.

“The fourth quarter of fiscal 2013 represents the seventh consecutive quarter of year-over-year improvement in comparable store traffic, restaurant sales and retail sales,” said Cracker Barrel Chief Executive Sandra Cochran. “The financial results of the fourth quarter and full year reflect the effective execution of our strategic plan.

“As we begin our 2014 fiscal year, we are poised to capitalize on the achievements of fiscal 2013. I am proud of our team’s hard work and dedication, especially those in the field who are committed to serving our Cracker Barrel guests every day.”

Activist shareholder Sardar Biglari on Monday called for the Lebanon-based restaurant and retail store to declare a special dividend of $20 a share.

Biglari said in a letter he plans to call for a special meeting of shareholders to vote on the request.

Biglari’s holdings company, which also owns Steak ‘N Shake and Western Sizzlin’, owns nearly 20 percent of Cracker Barrel’s stock and stands as the largest shareholder in the company.

Cracker Barrel spurned Biglari last month in his third attempt to seek seats for himself and Biglari Holdings Vice Chairman Philip Cooley on its board of directors.

Biglari’s firm previously pressed proxy contests against Cracker Barrel in 2011 and 2012, both of which shareholders rejected by wide margins.

In his letter to the board Monday, Biglari criticized the group’s rejection and pushed for the special dividend. He said Cracker Barrel had amassed $58.5 million in cash and cash equivalents as of May 3. He said additional debt needed to fund the special dividend would bring the company's capital structure more in line with its peer group.

Cracker Barrel responded Tuesday with a statement it received the letter and would “respond to the letter in due course.”

Biglari also advised against opening new stores, accumulating more cash and repaying debt, calling such moves "asinine" owing to low returns on capital, low interest rates and a favorable refinancing environment.

Biglari said the company has been providing "mere lip service" and a media release "full of makeshift malarkey" regarding its shareholder-friendly moves, asserting Cracker Barrel's stock buybacks in the past two fiscal years were offset by shares issued to cover stockbased compensation for executives.

He also said he intends to take the matter to other shareholders as the 20-percent ownership stake carries the ability to demand a special meeting.

For the last fiscal year, Cracker Barrel reported a profit of $34.3 million, or $1.43 a share, down from $34.7 million, or $1.47 a share, a year earlier. The year-earlier period included a benefit of 27 cents a share owing to an additional week. Revenue decreased 3.7 percent to $674.1 million.

Operating margin fell from 8.6 percent to 8.1 percent.

Cracker Barrel stock opened market trading Wednesday at $104 per share and rose as high as $105.40, but closed at $104.73, down 2.27 points.

The price per stock dipped to $101.29 during midday trading. 

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