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CRACKER BARREL OLD COUNTRY STORE, INC. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 21, 2012 06:06PM
CRACKER BARREL OLD COUNTRY STORE, INC. (CBRL) filed Quarterly Report for the period ended 2012-01-27. Cracker Barrel has a market cap of $1.27 billion; its shares were traded at around $58.6955 with a P/E ratio of 14.6 and P/S ratio of 0.5. The dividend yield of Cracker Barrel stocks is 1.8%. Cracker Barrel had an annual average earning growth of 10.9% over the past 10 years. GuruFocus rated Cracker Barrel the business predictability rank of 2-star.
Highlight of Business Operations:Total revenue for the second quarter and first six months of 2012 increased 5.1% and 2.6%, respectively, compared to the same periods in the prior year. The following table highlights the comparable store sales results for the second quarter and first six months of 2012 as compared to the same periods in the prior year:
For the first six months of 2012, our comparable store restaurant sales increase consisted of a 2.3% average check increase for the six months (including a 2.1% average menu price increase) and a 1.3% guest traffic decrease. We believe that the comparable store retail sales increase resulted from a more appealing retail merchandise selection than in the prior year partially offset by the decrease in guest traffic.
Restaurant cost of goods sold as a percentage of restaurant revenue was 27.5% in the second quarter of 2012 as compared to 26.6% in the prior year second quarter. Restaurant cost of goods sold as a percentage of restaurant revenue was 27.0% for the first six months of 2012 as compared to 26.0% in the same period in the prior year. Both increases were primarily the result of food commodity inflation partially offset by our menu price increase referenced above. Commodity inflation was 5.7% and 5.6%, respectively, in the second quarter and first six months of 2012.
Retail cost of goods sold as a percentage of retail revenue was relatively constant during the second quarter of 2012 at 57.1% as compared to 57.0% in the prior year second quarter. Retail cost of goods sold as a percentage of retail revenue was 54.3% for the first six months of 2012 as compared to 53.7% in the same period in the prior year. This increase resulted primarily from a change in retail inventory valuation reserves.
We had positive working capital of $4,953 at January 27, 2012 versus negative working capital of $21,188 at July 29, 2011. Working capital increased from July 29, 2011 primarily because of an increase in cash generated from operations partially offset by lower retail inventories and a net decrease in working capital related to the increase in sales of our gift cards during the holiday shopping season. In the restaurant industry, virtually all sales are either for cash or third-party credit or debit card. Like many other restaurant companies, we are able to, and often do, operate with negative working capital. Restaurant inventories purchased through our principal food distributor are on terms of net zero days, while restaurant inventories purchased locally generally are financed from normal trade credit. Because of our retail gift shops, which have a lower product turnover than the restaurant business, we carry larger inventories than many other companies in the restaurant industry. Retail inventories purchased domestically generally are financed from normal trade credit, while imported retail inventories generally are purchased through wire transfers. These various trade terms are aided by rapid turnover of the restaurant inventory. Employees generally are paid on weekly or semi-monthly schedules in arrears for hours worked except for bonuses that are paid either quarterly or annually in arrears. Many other operating expenses have normal trade terms and certain expenses such as certain taxes and some benefits are deferred for longer periods of time.
Stocks Discussed: CBRL,