Cracker Barrel Old Country Store reported its financial results for the first quarter of fiscal 2017 ended October 28.
First Quarter Fiscal 2017 Highlights
Compared to the prior year first quarter, comparable store restaurant sales increased 1.3 percent, marking the company's 10th consecutive quarter of positive comparable store restaurant sales.
Operating income as a percent of total revenue increased 140 basis points, over the prior year quarter, to 10.7 percent.
Commenting on the first quarter and fiscal year outlook, Cracker Barrel president and chief executive officer Sandra B. Cochran says, "This quarter's financial results exceeded our expectations, reflecting the strength and differentiation of our brand, as well our ability to leverage our cost saving initiatives and the favorable commodity environment. I believe that our strategic focus to Enhance the Core, Expand the Footprint, and Extend the Brand will further move the brand forward and deliver solid returns for our shareholders."
First Quarter Fiscal 2017 Results
The company reported total revenue of $710 million for the first quarter of fiscal 2017, representing an increase of 1 percent over the first quarter of the prior year. Comparable store restaurant sales increased 1.3 percent, including a 3 percent increase in average check partially offset by a 1.7 percent decrease in store traffic. The average menu price increase for the quarter was approximately 2.2 percent. Comparable store retail sales decreased 4 percent from the prior year quarter. The company opened two new Cracker Barrel stores during the quarter, bringing the store count to 643 combined Cracker Barrel Old Country Store and Holler & Dash Biscuit House locations at quarter-end.
Comparable store restaurant traffic, average check and comparable store restaurant sales and retail sales for the fiscal months of August, September and October and the first quarter were as follows:
Operating income in the first quarter was $75.7 million, or 10.7 percent of total revenue. Operating income in the prior year quarter was $65.3 million, or 9.3 percent of total revenue. As a percentage of total revenue, reductions in cost of goods sold and general and administrative expenses were partially offset by an increase in labor and related and other store operating expenses.
Fiscal 2017 Outlook
Based upon year-to-date financial performance, the company raised its previous fiscal 2017 earnings guidance and now expects to report earnings per diluted share of between $8.10 and $8.25. The company expects total revenue of between $2.95 billion and $3 billion, reflecting the expected opening of eight or nine new Cracker Barrel stores and four or five new Holler & Dash Biscuit House restaurants, and projected comparable store restaurant sales in the range of 1 percent to 2 percent and comparable store retail sales of approximately -1.0 percent. The company now expects food commodity deflation in the range of 3 percent to 4 percent for the year. The company now projects an operating income margin of approximately 10 percent of total revenue for fiscal 2017. The company expects depreciation expense between $85 million and $87 million; net interest expense of approximately $15 million; and capital expenditures of approximately $125 million. The company now anticipates an effective tax rate for fiscal 2017 of approximately 32 percent.
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