For its fiscal Q4, CBRL reported EPS of $2.23, beating the $2.18 Capital IQ consensus by $0.05. This was its fourth straight quarter in which it exceeded analysts' bottom line expectations. What investors are also honing in on is that EPS still grew a little more than 5%, despite the fact that revenue was basically flat year/year. In fact, since 2014, CBRL has grown EPS by nearly 50% while revenue growth has barely budged. This demonstrates that the company is executing efficiently and that it is able to push margins higher in a difficult environment.
On the topic of margins, operating income improved by 80 basis points to 11.2%, driven by favorable cost of goods sold and labor related expenses. This helped push operating income higher by 7% to $83.2 million. The company is also creating strong cash flow generation, which bodes well for its aforementioned dividend. Over the past twelve months, cash flow from operations jumped by 18% to $320.8 million.
Generating topline growth remains a major challenge for the company, though. For the quarter, revenue was down 0.9% to $743.2 million, slightly missing the $746.7 million consensus. Over the past eight quarters, revenue growth has fluctuated between (0.3)% and +3.7%. Comps, particularly in its retail (gift shop) area, have been weak, consistently in negative territory, and its store expansion plans have been modest. In fact, it has only added 8 new stores over the past twelve months (2 in Q4), bringing its total to 649.
As far as comparable store sales go, restaurant traffic was down 1.7% for the quarter, comparable restaurant sales were lower by 0.8%, and comparable retail sales declined 4.4%. CBRL did implement some menu price increases, lifting the average check by 0.9%, helping to offset some of the traffic weakness.
CBRL also provided 1Q18 and FY18 guidance in its earnings press release, and that too was mixed. Specifically, it issued downside guidance for Q1, seeing EPS of $1.85-$1.95 vs. the $2.10 consensus, and inline FY18 EPS and revenue of $8.85-$9.00 and $3.1 billion respectively. It also is forecasting comparable store restaurant sales of 0.0-1.0%.
All in all, CBRL is doing an admirable job of managing the business in a difficult climate, pushing earnings and cash flow higher. CBRL is also a decent income play with a yield above 3%. Growth investors certainly aren't going to be attracted to this name, but, for those looking for a relatively stable company that pays a good dividend, it may look appealing following this recent sell-off.