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CRACKER BARREL OLD COUNTRY STORE, INC. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: June 3, 2011 10:17AM

CRACKER BARREL OLD COUNTRY STORE, INC. (CBRL) filed Quarterly Report for the period ended 2011-04-29. Cracker Barrel Old Country Store Inc has a market cap of $1.05 billion; its shares were traded at around $45.18 with a P/E ratio of 11.4 and P/S ratio of 0.5. The dividend yield of Cracker Barrel Old Country Store Inc stocks is 1.9%. Cracker Barrel Old Country Store Inc had an annual average earning growth of 14.4% over the past 10 years. GuruFocus rated Cracker Barrel Old Country Store Inc the business predictability rank of 4-star.



Highlight of Business Operations:

Total revenue for the third quarter of 2011 increased 0.7% compared to the prior year third quarter. For the quarter, comparable store restaurant sales decreased 0.3% and comparable store retail sales increased 0.1% resulting in a total combined comparable store sales decrease of 0.2%. The comparable store restaurant sales decrease consisted of a 2.6% guest traffic decrease and a 2.3% average check increase for the quarter (including a 1.9% average menu price increase). The comparable store retail sales increase resulted from a higher average retail selling price than in the prior year partially offset by a decrease in guest traffic. Sales from newly opened stores accounted for the balance of the total revenue increase in the third quarter of 2011.

Total revenue for the first nine months of 2011 increased 1.6% compared to the same period in the prior year. For the first nine months of 2011, comparable store restaurant sales increased 0.8% and comparable store retail sales increased 1.0% resulting in a combined comparable store sales increase of 0.8%. The comparable store restaurant sales increase consisted of a 2.0% average check increase for the nine months (including a 1.9% average menu price increase) and a 1.2% guest traffic decrease. We believe that the comparable store retail sales increase resulted from a more appealing retail merchandise selection and a higher average retail selling price than in the prior year partially offset by a decrease in guest traffic. Sales from newly opened stores accounted for the balance of the total revenue increase in the first nine months of 2011.

Gross profit for the first nine months of 2011 was 68.2% as a percentage of total revenue compared to 68.6% in the same period in the prior year. This decrease in gross profit as a percentage of total revenue resulted from lower gross profit from restaurant operations. Including inflation and specification changes, food commodity costs increased 2.5% as compared to the prior year. We also experienced higher food waste, which decreased gross profit by 0.2% as a percentage of total revenue. These decreases in gross profit were partially offset by our menu price increase discussed above.

Labor and other related expenses include all direct and indirect labor and related costs incurred in store operations. Labor and other related expenses as a percentage of total revenue decreased during the third quarter of 2011 to 39.0% as compared to 39.1% in the third quarter of the prior year. This decrease resulted primarily from decreases of 0.4% and 0.1% as a percentage of total revenue, respectively, in store management compensation and store hourly labor costs partially offset by increases of 0.2%, 0.1% and 0.1%, respectively, in healthcare costs, payroll taxes and pre-opening labor. The decrease in store management compensation resulted from lower store bonus accruals, which reflected lower performance against financial objectives. The decrease in store hourly labor costs as percentage of total revenue resulted from menu price increases being higher than wage inflation. The increase in healthcare costs resulted from higher medical claims. The increase in payroll taxes resulted from increases in unemployment tax rates. The increase in pre-opening labor resulted from the increase in the number of new stores opening in 2011 as compared to the prior year.

Labor and other related expenses as a percentage of total revenue decreased to 37.1% in the first nine months of 2011 as compared to 37.9% in the same period in the prior year. This decrease resulted primarily from decreases of 0.4%, 0.3% and 0.2%, respectively, in store management compensation, healthcare costs and store hourly labor costs. The decrease in store management compensation resulted from lower store bonus accruals, which reflected lower performance against financial objectives. The decrease in healthcare costs resulted from lower medical claims and the benefit of the calendar 2010 group health plan design changes. The decrease in store hourly labor costs as a percentage of total revenue resulted from menu price increases being higher than wage inflation.

General and administrative expenses as a percentage of total revenue were 5.8% and 5.7%, respectively, in the third quarter and first nine months of 2011 as compared to 6.6% and 6.0%, respectively, in the third quarter and first nine months of 2010. Both decreases resulted primarily from lower incentive compensation expense, including share-based compensation, which reflected lower performance against financial objectives in 2011 as compared to the prior year.

Read the The complete Report



Stocks Discussed: CBRL,
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