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CRACKER BARREL OLD COUNTRY STORE, INC. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 22, 2011 11:54AM

CRACKER BARREL OLD COUNTRY STORE, INC. (CBRL) filed Quarterly Report for the period ended 2011-10-28. Cracker Barrel Old Country Store Inc has a market cap of $1.05 billion; its shares were traded at around $45.93 with a P/E ratio of 12.1 and P/S ratio of 0.4. The dividend yield of Cracker Barrel Old Country Store Inc stocks is 2.2%. Cracker Barrel Old Country Store Inc had an annual average earning growth of 10.9% over the past 10 years. GuruFocus rated Cracker Barrel Old Country Store Inc the business predictability rank of 2-star.



Highlight of Business Operations:

Total revenue for the first quarter of 2012 was flat compared to the prior year first quarter. For the quarter, our comparable store restaurant sales decreased 1.6% and comparable store retail sales decreased 1.3% resulting in a total combined comparable store sales decrease of 1.5%. Our comparable store restaurant sales decrease consisted of a 3.8% guest traffic decrease and a 2.2% average check increase for the quarter (including a 2.1% average menu price increase). The comparable store retail sales decrease resulted from the decline in guest traffic. The total combined comparable store sales decrease in the first quarter of 2012 was partially offset by sales from newly opened stores.

Retail cost of goods sold as a percentage of retail revenue was 50.1% in the first quarter of 2012 as compared to 49.1% in the prior year first quarter. Higher retail cost of goods sold resulted primarily from an increase in freight expense resulting from higher fuel costs, a change in retail inventory valuation reserves and design costs related to proprietary products. These costs increased retail cost of goods sold as compared to the prior year by 0.5%, 0.3% and 0.1% as a percentage of retail revenue, respectively.

Labor and related expenses include all direct and indirect labor and related costs incurred in store operations. Labor and related expenses as a percentage of total revenue decreased during the first quarter of 2012 to 37.0% as compared to 37.6% in the first quarter of the prior year. This decrease resulted from decreases of 0.5%, 0.3% and 0.1% as a percentage of total revenue, respectively, in workers compensation expense, health care costs and store hourly labor partially offset by increases of 0.2% and 0.1% as a percentage of total revenue, respectively, in payroll taxes and store management compensation.

Other store operating expenses as a percentage of total revenue decreased to 18.2% in the first quarter of 2012 as compared to 18.7% in the first quarter of the prior year. This decrease resulted primarily from the settlement of ongoing litigation in the first quarter of 2012, which represented a decrease of 0.5% as a percentage of total revenue. This settlement was accounted for as a gain contingency and related to a matter previously recorded in other store operating expenses. Additionally, a 0.2% decrease as a percentage of total revenue in maintenance expense resulted from cost saving initiatives. These decreases were partially offset by a 0.1% increase as a percentage of total revenue in advertising expense which resulted primarily from higher media spending to support our new marketing messaging. We presently expect the quarterly pattern of advertising spending will be different this year compared to the prior year with the highest level of spending expected in the second quarter of 2012. This is the result of a change in advertising strategy which we expect to implement during the second quarter of 2012.

General and administrative expenses as a percentage of total revenue increased to 6.2% in the first quarter of 2012 as compared to 6.1% in the first quarter of the prior year. This increase resulted from increases of 0.3% each as a percentage of total revenue in manager meeting expense and expenses related to the proxy contest with Biglari Holdings Inc. In the first quarter of 2012, we held a manager meeting conference for the first time in several years. These increases were partially offset by decreases of 0.3% and 0.1% as a percentage of total revenue, respectively, in salaries and incentive compensation. The decrease in salaries resulted primarily from the elimination of approximately 60 management and staff positions in July 2011. The decrease in incentive compensation resulted primarily from the reduction in management and staff positions in July 2011 and lower share-based compensation expense compared to the prior year s quarter.

Read the The complete Report



Stocks Discussed: CBRL,
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