Cracker Barrel (CBRL) is expected to generate solid double-digit earnings growth for the next several years. Even so, this Zacks #2 Rank stock trades at just 14x fiscal 2010 EPS estimates and 12x fiscal 2011 EPS estimates.
Growth and Income
Analysts estimate that Cracker Barrel will grow its EPS 21.0% in fiscal 2010, 12.3% in fiscal 2011, and 10.5% per year for the long term. The stock also offers investors a dividend yield of 1.6%.
Business
Cracker Barrel Old Country Store operates 594 full-service restaurants and gift shops primarily along interstate highways. Its restaurants serve breakfast, lunch, and dinner, and the average check is around $8.
The company is currently rolling out its “Seat to Eat” initiative. Management believes this initiative will deliver more consistent in peak and off-peak hours, increase store productivity, and improve guest satisfaction. CBRL has rolled out this program in about 24% of its stores and expects to complete this roll out to all its stores by the end of fiscal 2011.
Fiscal Third-Quarter Results
Total revenue increased 1.9% during the quarter to $578.2 million with restaurant same-store sales of 0.6% and retail same-store sales of 3.2%. The company indicated that the snow storms in February negatively impacted its same-store sales by 100 basis points.
The company earned $0.61 per share, an increase of 17.3% compared to the year-ago quarter. Cracker Barrel beat the Zacks Consensus Estimate by 3 cents, or 5.2%.
In the last five quarters, Cracker Barrel has beaten the Zacks Consensus by an average of 17.5%.
Estimates
In the last week, the Zacks Consensus Estimate for fiscal 2010 is up 6 cents, or 1.7%, to $3.58. The Zacks Consensus for fiscal 2011 is higher by 8 cents, or 8%.
The Chart
CBRL shares bottomed around $26 in August 2009, The stock enjoyed a nice uptrend until late April 2007, when it peaked around $53.Along with the rest of the market, CBRL shares have been volatile for the last month. CBRL sold-off as much as 13%. The stock is now trading about 7% below its 52-week high.
