Cracker Barrel Old Country Store, Inc. reported its fourth consecutive quarter of sales and traffic increases Thursday, citing its advertising campaigns and menu changes as two of its core business drivers.
Cracker Barrel reported its net income for the its first quarter of 2013 fell to $23.2 million, or 97 cents per share, from $23.8 million, or $1.03 per share the year prior. Total revenue was approximately $627.5 million, a 5-percent increase year over year.
Same-store restaurant sales at Lebanon, Tenn.-based company grew 3.3 percent during its Nov. 2-ended first quarter of 2013, while same-store restaurant traffic increased 0.8 percent year over year.
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During the quarter, the family-dining chain added more better-for-you options while continuing a focus on affordability, said Sandra Cochran, the company’s chief executive. And, she said, that’s likely what drove customer traffic.
“We’ve been talking now for over a year about our view of the customer, which is that they’re interested in affordability and better-for-you [offerings],” she said. As such, the company highlighted its Country Dinner Plates during the quarter, which feature a protein, two sides and bread service for $7.69.
During the period, average check at Cracker Barrel increased 2.5 percent, which could be attributed to menu price increases of 2 percent, according to chief financial officer Lawrence E. Hyatt.
The guest’s needs, Cochran said, continue to be the focus of the company’s menu changes. The company is already in holiday mode during the second quarter 2013, she said, adding that Thanksgiving 2012 was the company’s strongest sales day ever.
Cracker Barrel also expanded its brand’s reach Nov. 13, when the company announced a multi-year licensing agreement with John Morrell Food Group, which will license Cracker Barrel brand ham, bacon and lunch meats. Although the agreement probably won’t impact restaurant revenues, it will increase the brand’s visibility outside of Cracker Barrel restaurants, Cochran said.
Meanwhile, the company has been involved in an ongoing battle with Sardar Biglari, an activist investor. Biglari’s San Antonio, Texas-based Biglari Holdings Inc. owns 17 percent of Cracker Barrel's outstanding shares.
On Nov. 15, Cracker Barrel’s shareholders blocked Biglari from joining the company’s board of directors. The rejection was Biglari’s second from the board in two years.
None of the questions during the company’s question and answer session with analysts during the earnings call were about the dispute.
Cracker Barrel operates 621 company owned namesake restaurants.
Contact Erin Dostal at erin.dostal@penton.com.
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