LEBANON Tenn. Cracker Barrel Old Country Store Inc., the operator of 588 restaurants and gift shops, posted Tuesday a 9-percent drop in its fiscal 2009 second-quarter profit on slowed sales, but still beat Wall Street estimates, which sent its stock up 16.4 percent.
The company also refined its forecast for the full fiscal year, which ends in July, to include nearly flat revenues that would reflect negative same-store sales, but maintained earnings guidance. Cracker Barrel said it would execute two sale-leaseback deals to garner between $55 million and $60 million, which would be used to pay down debt. The transactions will include 15 restaurants and its retail distribution center and are expected to close by the fiscal year end.
The family-dining operator also said it would slow store development to seven locations in fiscal 2010, down from the 11 units already opened in the current fiscal year.
“By limiting new store development for next year, we can focus on executing the basics in order to maximize cash flows,” said chairman, president and chief executive Michael A. Woodhouse.
For the second quarter ended Jan. 30, Cracker Barrel posted net income of $18.4 million, or 81 cents per share, compared with earnings of $20.2 million, or 85 cents per share, in the same quarter a year earlier. Analyst expectations had averaged 76 cents per share for the latest quarter, and many cited Cracker Barrel’s cost controls and better-than-expected restaurant sales as earnings drivers. The company’s stock rose 16.4 percent Tuesday to close at $20.89 per share.
Revenues for the second quarter fell 1 percent to $630.2 million, and reflected a same-store restaurant sales declines of 1.5 percent and a same-store retail sales drop of 7.0 percent.
Contact Sarah Lockyer at [email protected].
