On Sept. 15 before the market opened, Cracker Barrel Old Country Store Inc. (CBRL, Financial) released its fourth-quarter fiscal 2020 results. While the restaurant operator posted a wider-than-expected quarterly loss, revenue surpassed expectations.
Snapshot of the quarter
The Lebanon, Tennessee-based company posted an adjusted loss per share of 85 cents in the fourth quarter, down a mammoth 131.48% on a year-over-year basis. Analysts had predicted a loss per share of 55 cents. Revenue of $495.1 million dipped 37.1%, but surpassed expectations by 2.36%.
Reflecting on the quarter, President and CEO Sandra B. Cochran said:
"I am encouraged by our sales recovery, and I am pleased with both the progress we have made on key initiatives and with how well our teams have continued to manage our business under changing and challenging circumstances. Our actions have put us in a position of financial strength which will allow us to invest in initiatives that we believe will drive long-term value creation for our shareholders. Cracker Barrel remains a trusted and highly differentiated brand with loyal guests, and our management team is confident our fiscal 2021 business priorities and plans will help us successfully navigate this environment while further strengthening our leadership position in casual dining."
For the quarter, the company recorded a decline of 39.2% in the comparable store restaurant sales as a rise in average check was more than offset by a 40.7% fall in comparable store restaurant traffic. Likewise, comparable store retail sales plunged 32.3% over the past year.
GAAP operating income stood at $40.1 million. That compares with $79.4 million reported in the year-ago quarter. Additionally, the company reported adjusted operating loss of $20 million.
Key developments
The restaurant and retail chain entered into two sale and leaseback transactions with Oak Street Real Estate Capital, which is a real estate investment firm. In the first deal, the company sold 64 of its 400 locations in the fourth quarter to Oak Street and leased those back under a long-term deal of 20 years.
The second deal involved Cracker barrel selling 62 restaurants to Oak Street valued at approximately $150 million, which further augmented liquidity and strengthened its financial position. The transaction closed in the first quarter of fiscal 2021.
Guidance
Cracker Barrel pulled its financial forecast for fiscal 2021. However, the company did estimate that capital spending would be roughly $100 million and that it would open as many as three new Cracker Barrel stores and nearly 15 new Maple Street units.
Disclosure: I do not hold any positions in the stocks mentioned.
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