Cracker Barrel (CBRL 163.37, -5.32) trades 3.2% lower this afternoon after the company reported a mixed Q2 with worse than expected Q3 earnings guidance. Further, despite posting a modest increase, CBRL same restaurant sales were worse than market expectations.
CBRL, mainly known for its 641 company-owned Cracker Barrel dining locations, also operates four company-owned Holler & Dash Biscuit House locations. Fare includes mostly home-style food with retail shopping at select locations.
Specifically, for this period, CBRL reported better than expected Q2 adjusted earnings per share (EPS) of $2.19 on revenues which missed market expectations yet rose about 1.1% compared to last year to $772.7 million. Restaurant revenues were up 1.8% to about $591.1 million. Revenues marked as Retail were down a modest 0.8% to $181.6 million in Q2.
Further, comparable restaurant sales were up 0.6%, including a 2.7% increase in average check and partially offset by a 2.1% decline in comparable restaurant traffic. Compared to the prior year quarter, comparable store retail sales were down about 2.2%. Average menu price for the quarter was up about 2.1%. December same restaurant results were impacted by an estimated 1.6% due to inclement weather. Also, the company believes the Christmas fiscal calendar timing shift increased December traffic and sales by about 5.7%, while reducing January traffic and sales by about 5.0%.
In Q3, CBRL expects to report EPS between $1.75-1.85. Looking ahead, CBRL reaffirmed its previous earnings guidance and expects to report EPS for the 2017 fiscal year between $8.10-8.25. Further, CBRL now expects total revenue of about $2.95 billion, down from previous $2.95-3.0 billion, reflecting the expected opening of eight new Cracker Barrel stores and four new Holler & Dash Biscuit House restaurants. Management also expects comparable store restaurant sales between 0.5-1.0%, down from +1-2%, and comparable store retail sales of about -2.0%, down from expectations of a -1% decline, reflecting the more cautious expectations for the second half of the fiscal year.