Cracker Barrel Old Country Store Inc. said second-quarter profit increased 10 percent from a year ago, even as severely inclement weather in January derailed sales and traffic momentum.
For the Jan. 28-ended quarter, net income totaled $28.8 million, or $1.20 per share, compared with $25.4 million, or $1.09 per share, in the same quarter a year earlier.
Total latest-quarter revenue rose 1.2 percent to $640.3 million, reflecting a 0.3-percent increase is same-store restaurant sales and a 1.3-percent increase in same-store retail sales. Cracker Barrel operates 598 family-dining restaurants that also offer retail food and merchandise for sale.
In the restaurants, Cracker Barrel took an average menu price increase of 1.8 percent during the quarter.
January was a tough month for Cracker Barrel, as winter weather wiped out gains in traffic and same-store sales that were building during the previous two months. Guest traffic had increased 0.4 percent in November and 2.8 percent in December before falling 6.6 percent in January, the company reported. Same-store restaurant sales had risen 1.9 percent in November and 4.7 percent in December before falling 4.6 percent in January.
Chief executive Michael Woodhouse said in a statement that Cracker Barrel’s guest counts outperformed the Knapp-Track Traffic Index, which benchmarks the nation’s biggest casual-dining chains, for the 18th consecutive quarter, and he added that restaurant and retail sales at Cracker Barrel were positive for the fourth straight quarter.
“As we had expected, we experienced higher commodity costs in the second quarter,” he said. “Additionally, operating income was further affected by the severe weather in December and January. Our efforts to improve the guest experience and drive traffic through the ‘Seat to Eat’ initiative continue, and we are pleased to report we are on schedule to complete the roll-out in May.”
Cracker Barrel’s ‘Seat to Eat’ program aims to get customers seated and eating in 14 minutes or less. The program would reduce waiting and increase table turnover.
The Lebanon, Tenn.-based company reaffirmed previously stated performance guidance for fiscal 2011, projecting annual revenue growth of between 2.5 percent and 3.5 percent. That increase includes expected openings of 11 new restaurants and same-store sales increases of between 1.5 percent and 2.5 percent in the restaurants and between 2 percent and 3 percent in the retail stores.
“As we look forward to the second half of this fiscal year, we are focused on execution at the store level,” Woodhouse said. “We believe that the fundamental improvements we are putting in place are geared to sustain long-term growth and profitability.”
Contact Mark Brandau at [email protected].