LEBANON Tenn. CBRL Group Inc., operator of the 576-unit Cracker Barrel Old Country Store chain, reported a 15-percent drop in its third-quarter profit as slower guest traffic, higher costs and a lack of interest income ate into the company’s bottom line.
The quarter’s results, which came in below analyst expectations, led CBRL to tighten its full-year earnings outlook to between $3.02 per share and $3.12 per share, from the company’s prior expectation of between $3.00 per share and $3.15 per share. Total revenues are expected to grow about 2 percent over the prior year, the low end of CBRL’s previous forecast of between 2 percent and 3 percent.
“While our restaurant traffic and retail sales were not as strong as we had expected in the third quarter, we are pleased with the way our fourth quarter has started,” Michael A. Woodhouse, CBRL’s chairman, president and chief executive, said in a statement. “We continue to expect earnings per share to be substantially better than fiscal 2007 É as a result of our operating focus and the recapitalization initiatives that we began in fiscal 2006.”
Ayear earlier, CBRL had earned $2.64 per share.
For the quarter ended May 2, net income totaled $10.5 million, down from a year-earlier, third-quarter profit of $12.1 million. Per-share earnings in the latest quarter were 46 cents, up 2 cents from a year earlier when the company’s share count was 24-percent higher before corporate share repurchases.
The company’s costs of goods rose 8 percent year-over-year, and CBRL booked no interest income in the latest quarter, versus $2.2 million in the year-ago quarter that was earned from cash balances held before the company’s sale of Logan’s Roadhouse.
Revenue for the third quarter grew 3.3 percent to $567.1 million. Same-store restaurant sales rose 0.2 percent, and reflected a 3.3-percent decline in guest traffic and a 3.7-percent menu price increase that helped boost the average check by 3.5 percent. Same-store retail sales fell 2.1 percent.
CBRL said same-store sales thus far in May, which will be reported on June 3, are expected to be “flat to slightly positive.” Same-store sales for the full year are expected to be up 1 percent to 1.5 percent, the company reported. CBRL also noted that it would stop reporting monthly sales figures in fiscal 2009, which begins in August, and instead would disclose sales results only during its quarterly earnings reports.