Cracker Barrel Old Country Store, Inc. today reported financial results for the third quarter of fiscal 2014 ended May 2, 2014. While customer traffic declined 2.9 percent, the average check increased 2.6 percent, partially offsetting the decline in visits.
The company reported total revenue of $643.3 million for the third quarter of fiscal 2014, representing an increase of 0.5 percent over the third quarter of the prior year. Comparable store restaurant sales decreased 0.6 percent. The average menu price increase for the quarter was approximately 1.8 percent. The company opened two stores during the third quarter, for a total of three new store openings year-to-date.
Comparable restaurant traffic fell most in February, declining 4.9 percent, and March, declining 4 percent. A 0.4 percent decline in April averaged out to a 2.9 percent decline in traffic for the third quarter. Still, sales at comparable restaurants fell only 0.6 percent for the quarter.
“Like many in our industry, Cracker Barrel continued to face headwinds during the quarter from severe winter weather, a challenging consumer environment and an increasingly promotional competitive landscape," Cracker Barrel President and CEO Sandra B. Cochran said in a statement.
Operating income in the third quarter was $45.2 million, or 7 percent of total revenue. Adjusted for special meeting expenses, adjusted operating income was $46.3 million, or 7.2 percent of total revenue, compared with operating income of $44.2 million, or 6.9 percent of total revenue, in the prior year quarter. Reductions in cost of goods sold and general and administrative expenses as a percent of total revenue were partially offset by an increase in other store operating expenses.
Cracker Barrel expects total revenue for the year to be approximately $2.7 billion and an operating income margin between 7.7 percent and 7.9 percent of total revenue. The revenue projection for fiscal 2014 reflects the expected opening of seven new Cracker Barrel stores, projected increases in comparable store restaurant sales of approximately 0.5 percent, and approximately flat comparable store retail sales.
The company’s projections are based on expected food commodity inflation of approximately 2 percent for the year and 2.5 percent for the fourth quarter.
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