Cracker Barrel (NASDAQ:CBRL) Posts Q1 Sales In Line With Estimates
Restaurant company Cracker Barrel (NASDAQ:CBRL) met Wall Street's revenue expectations in Q1 CY2025, but sales were flat year on year at $821.1 million. The company's outlook for the full year was close to analysts' estimates with revenue guided to $3.48 billion at the midpoint. Its non-GAAP profit of $0.58 per share was significantly above analysts' consensus estimates.
Is now the time to buy Cracker Barrel? Find out in our full research report.
Revenue: $821.1 million vs analyst estimates of $824.5 million (flat year on year, in line)
Adjusted EPS: $0.58 vs analyst estimates of $0.21 (significant beat)
Adjusted EBITDA: $48.12 million vs analyst estimates of $41.1 million (5.9% margin, 17.1% beat)
The company reconfirmed its revenue guidance for the full year of $3.48 billion at the midpoint
EBITDA guidance for the full year is $220 million at the midpoint, above analyst estimates of $212.6 million
Operating Margin: 1.8%, up from -2.4% in the same quarter last year
Free Cash Flow was -$13.24 million, down from $7.83 million in the same quarter last year
Locations: 728 at quarter end, up from 721 in the same quarter last year
Same-Store Sales rose 1% year on year (-1.5% in the same quarter last year)
Market Capitalization: $1.29 billion
Commenting on the third quarter results, Cracker Barrel President and Chief Executive Officer Julie Masino said, "Our third quarter performance exceeded our expectations and represents the fourth consecutive quarter of positive comparable store restaurant sales growth. We remain focused on executing our transformation plan and believe we are well-positioned to deliver a strong finish to the fiscal year."
Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ:CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.
A company's long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $3.51 billion in revenue over the past 12 months, Cracker Barrel is one of the larger restaurant chains in the industry and benefits from a well-known brand that influences consumer purchasing decisions. However, its scale is a double-edged sword because it's harder to find incremental growth when your existing restaurant banners have penetrated most of the market. To expand meaningfully, Cracker Barrel likely needs to tweak its prices, start new chains, or enter new markets.
As you can see below, Cracker Barrel grew its sales at a weak 2.1% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as its restaurant footprint remained unchanged and it barely increased sales at existing, established dining locations.
This quarter, Cracker Barrel's $821.1 million of revenue was flat year on year and in line with Wall Street's estimates.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a slight deceleration versus the last six years. This projection doesn't excite us and suggests its menu offerings will face some demand challenges.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
A restaurant chain's total number of dining locations influences how much it can sell and how quickly revenue can grow.
Cracker Barrel operated 728 locations in the latest quarter, and over the last two years, has kept its restaurant count flat while other restaurant businesses have opted for growth.
When a chain doesn't open many new restaurants, it usually means there's stable demand for its meals and it's focused on improving operational efficiency to increase profitability.
A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it's prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year.
Cracker Barrel's demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company's same-store sales have grown by 1.3% per year. Given its flat restaurant base over the same period, this performance stems from a mixture of higher prices and increased foot traffic at existing locations.
In the latest quarter, Cracker Barrel's same-store sales rose 1% year on year. This performance was more or less in line with its historical levels.
We were impressed by how significantly Cracker Barrel blew past analysts' EPS and EBITDA expectations this quarter. We were also excited its full-year EBITDA guidance outperformed Wall Street's estimates. On the other hand, its same-store sales slightly missed, but we still think this was a solid quarter with some key areas of upside. The stock traded up 3% to $59.50 immediately following the results.
Cracker Barrel put up rock-solid earnings, but one quarter doesn't necessarily make the stock a buy. Let's see if this is a good investment. When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 minutes ago
- Yahoo
FLASHBACK: Musk accused Trump, GOP leaders of not wanting to cut spending — here's where they said they would
Elon Musk's fiery feud with President Donald Trump spilled onto the top Republicans in Congress, where the tech billionaire questioned if their zeal to cut spending had disappeared. Musk launched into a social media assault this week against Trump's "big, beautiful bill," and accused Republicans of crafting a "disgusting abomination" full of wasteful spending. What started as a rant against the bill turned into pointed attacks against Trump, Senate Majority Leader John Thune, R-S.D., and House Speaker Mike Johnson, R-La. 'He's Not A Big Factor': Trump's Senate Allies Dismiss Elon Musk's Calls To 'Kill The Bill' The tech billionaire and former head of Trump's Department of Government Efficiency (DOGE) lamented the bill as not cutting deep enough into Washington's spending addiction. The House GOP's offering, which is now being modified in the Senate, set a goal of $1.5 trillion in spending cuts. Musk set a benchmark of finding $2 trillion in waste, fraud and abuse to slash with his DOGE initiative, but fell far short, hitting only $160 billion in his four-month stint as a special government employee. Read On The Fox News App Elon Musk Warpath Against Trump's 'Big, Beautiful Bill' Rattles House Gop Still, he came with receipts, questioning whether Trump, Thune and Johnson were actually committed to making deep cuts. Below are moments from the campaign trail and recent months compiled by Fox News Digital where the trio affirmed their commitment to putting a dent in the nation's nearly $37 trillion debt. A common theme for Trump during his 2024 presidential campaign was to go after the Biden administration, and his opponent, former Vice President Kamala Harris, for "throwing billions of dollars out the window." The then-presidential candidate vowed that should he win a second term, his incoming administration would halt wasteful spending. "We will stop wasteful spending and big government special interest giveaways, and finally stand up for the American taxpayer, which hasn't happened since I was president," he said. "We stood up. Our current massive deficits will be reduced to practically nothing. Our country will be powered by growth. Our country, will be powered by growth, will pay off our debt, will have all this income coming in." Gop Senators Express 'Concerns,' 'Skepticism' Over Trump's Spending Bill After Musk Rant Thune has agreed with his colleagues in the House GOP that the tax cut package needs to achieve steep savings, and believes that the Senate GOP could take those cuts a step further. After the bill advanced from the House last month, the top Senate Republican re-upped his vow to slash federal funding. "It does everything that we set out to do. It modernizes our military, secures our border, extends tax relief and makes permanent tax relief that will lead to economic growth and better jobs in this country, and makes America energy dominant, coupled with the biggest spending reduction in American history," he said. "So those are our agenda items, and that's what we campaigned on. That's what we're going to do." Johnson had to strike a balancing act in the House to cobble together enough support behind the legislation, and struck deals and satisfied concerned lawmakers across the spectrum of the House GOP while still setting a goal of $1.5 trillion in spending cuts. Rooting out waste, fraud and abuse has been a continued mantra of the speaker and his allies. "I said this is the beginning of a process, and what you're going to see is a continuing theme of us identifying waste, fraud and abuse in government, which is our pledge of common sense, restoring common sense and fiscal sanity," Johnson said. Original article source: FLASHBACK: Musk accused Trump, GOP leaders of not wanting to cut spending — here's where they said they would
Yahoo
30 minutes ago
- Yahoo
Stock Market Today: Dow Jones, S&P 500 Near Highs, Palantir Leads Buys; What Matters For Tesla
The S&P 500 and Nasdaq are rallying toward record highs. Palantir and eToro are in buy areas. Tesla investors should focus on the TSLA chart.
Yahoo
30 minutes ago
- Yahoo
Trump's tax bill is undermining the foundations of global finance
For decades, investors have been able to rely on a simple truth: the US bond market is a safe place to put money. When wars broke out, economies crashed or other calamities struck, money flowed into US Treasuries, as Washington's bonds are known, to protect wealth. As a result, the US has been able to rely on a ready supply of investors willing to fund the country's ever-increasing appetite for tax cuts and public spending. Investors wanted US debt and the federal government was only too happy to provide it. Not even half a year into Donald Trump's presidential term, however, decades of orthodoxy are being turned on their head. 'The US has generally benefited from demand for Treasuries from overseas investors. It's viewed as the global risk-free asset,' says John Stopford, a fund manager at Ninety One. 'The concern is that a lot of those beliefs or tenets about the US are being called into question, in terms of how reliable, how safe an investment are US Treasuries?' Offshore investors, battered by volatility and bewildered by uncertainty since Trump took office, are becoming increasingly wary of the US bond market. Returns have suffered as Trump's trade policies have weakened the dollar and the president's planned debt splurge has raised questions about just how sustainable US borrowing really is. The latest flash point is Trump's 'big, beautiful' tax and spending bill, which the Congressional Budget Office said would add $2.4 trillion (£1.8 trillion) to the deficit over the next decade. Elon Musk might have hogged the headlines this week with his outbursts against the bill but investors and traders are airing the same concerns, especially as higher deficits mean the US treasury will be asking them to buy more and more of its bonds. 'We're seeing it in the asset management community, some insurance funds, some pension funds, and foreign investors overall as well. It's just more caution in the buying, rather than a full-blown 'sell everything',' says Gennadiy Goldberg, head of US rates strategy at TD Securities. A crisis in the US bond market, or even just a slow ebbing of investor confidence and faith, could be the most profound and revolutionary legacy of Trump's second term. The US market and its currency might no longer offer the safe haven against risk, nor the anchor for markets worldwide. An end of this financial exceptionalism would mean higher borrowing costs for the US and pose a challenge to the entire American economy model. Moody's became the last major credit rating agency to strip the US of its gold-plated borrower status last month and analysts have raised the prospect of Trump facing his own 'Liz Truss moment' as investors baulk at his spending plans. For now, concern is centred around where all this fiscal ill-discipline will leave the US in the 2030s and beyond. So investors are shying away from longer-dated Treasuries with terms such as 10, 20 or 30 years, and parking their money in shorter-term bonds that mature in one or two years. 'I see investors who are even cautious about the five to 10-year space,' Goldberg says. If this caution turns to panic, then a meltdown – with worldwide consequences – isn't out of the question. 'If there was a big deleveraging that happened – and there was a big source of selling, whether it's from foreign investors or hedge funds or levered investors or basis investors – it could potentially overwhelm the system,' Goldberg says. Foreign investors are also having to contend with a big drop in the US dollar, which is reducing their returns. 'It's fine to see bond yields rise if the currency is stable or appreciating. That's not what we're seeing at the moment. We're seeing bond yields rise in the US, and actually the currency, on a broad basket, is about 10pc down from its highs last year,' says James Ringer, a Schroders fund manager. The lack of buyers and the potential glut of bonds raises the possibility, or 'tail risk', that the market could cease to function properly. 'That would mean sellers overwhelming buyers,' says Goldberg. This could drive a sharp surge in rates and force an emergency intervention from the Federal Reserve. 'That is the risk going forward – that the system is unable to function if something goes wrong,' he adds. At the moment, there's little prospect of a panicked sell-off – mainly because investors have so few genuine alternatives. America's star may be on the wane but it is still the brightest light in the sky. 'The US is absolutely a mass market in terms of marketable debt. The second and third closest markets are an order of magnitude smaller, so that makes it really difficult for a lot of these investors to really get away from dollars,' says Goldberg. 'There's just no place for them to go.' But equally, with Trump at the helm, nobody is ruling anything out. 'Even if it's a tail risk or something that's unlikely, because it's there at the back of people's minds, potentially they do begin to change their behaviour,' Stopford says. 'They do begin to think, 'OK, well, I should have less exposure to the US, I should have less exposure to the dollar, I should be looking for alternatives that are safer, more reliable.' 'That's not bond vigilantes speculating. That's just people making rational decisions based on concerns about risk.' Scott Bessent began the week by telling the world: 'The United States of America is never going to default. That is never going to happen.' The comments to CBS News were meant to reassure. But the sheer fact that the US treasury secretary had to spell out something that has been taken for granted for decades highlights the fact that the fundamentals of the US financial system have been shaken. Whether they go on to crumble depends on what Trump does next. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Sign in to access your portfolio
