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S&P 500   5,011.12
DOW   37,775.38
QQQ   423.41
What's Driving Tesla Lower Ahead of its Earnings?
Stock market today: Asian markets sink, with Japan’s Nikkei down 3.5%, as Mideast tensions flare
How major US stock indexes fared Thursday, 4/18/2024
3 Steel Stocks Could Soar on New China Tariffs
CSX Co.: The Railroad Powering Ahead with an Earnings Beat
These are the Top 4 Stocks for Buybacks in 2024
'There is no time to waste': EU leaders want to boost competitiveness to close gap with US and China
S&P 500   5,011.12
DOW   37,775.38
QQQ   423.41
What's Driving Tesla Lower Ahead of its Earnings?
Stock market today: Asian markets sink, with Japan’s Nikkei down 3.5%, as Mideast tensions flare
How major US stock indexes fared Thursday, 4/18/2024
3 Steel Stocks Could Soar on New China Tariffs
CSX Co.: The Railroad Powering Ahead with an Earnings Beat
These are the Top 4 Stocks for Buybacks in 2024
'There is no time to waste': EU leaders want to boost competitiveness to close gap with US and China
S&P 500   5,011.12
DOW   37,775.38
QQQ   423.41
What's Driving Tesla Lower Ahead of its Earnings?
Stock market today: Asian markets sink, with Japan’s Nikkei down 3.5%, as Mideast tensions flare
How major US stock indexes fared Thursday, 4/18/2024
3 Steel Stocks Could Soar on New China Tariffs
CSX Co.: The Railroad Powering Ahead with an Earnings Beat
These are the Top 4 Stocks for Buybacks in 2024
'There is no time to waste': EU leaders want to boost competitiveness to close gap with US and China

This Is The Bottom For Cracker Barrel

This Is The Bottom For Cracker Barrel

Cracker Barrel Provides A Robust Outlook

Cracker Barrel NASDAQ: CBRL didn't give guidance for fiscal 2023 revenue or earnings. What it did give guidance for was inflation in a range of mid to high-single digits and that's kind of scary for the economy at large. Getting back to the point, Cracker Barrel also made two surprising moves at the end of the quarter that amount to an overwhelmingly bullish vote of confidence from the company. Cracker Barrel's management team increased the dividend by 30% and entered into a share repurchase program.  The repurchase program is worth $100 million or about 3% of the market cap while the dividend increase brings the payout back to the pre-COVID level. According to data from Marketbeat.com, that is worth about 3.75% of the share price making it a very attractive payout for us. 

Cracker Barrel Falls Short Of Consensus

Cracker Barrel had a good 4th quarter capping off a strong rebound from the COVID disruption. The problem is that the $784.41 in revenue missed the consensus estimate which is not good in a market looking for outperformance. The top-line revenue is good for growth of 58% over last year and almost perfectly flat versus the same time frame in 2019. Sales in both the one-year and two-year comparisons are underpinned by strengthening retail sales and off-premise food sales. Comp sales in the restaurants are up 53% over last year but down nearly 7% versus 2019 while retail sales are up 75% over last year and 18% versus 2019. Off-premise sales, which got a boost from the pandemic, are up 19% versus last year and 108% versus 2019.


Moving down the report, the company experienced a slight expansion of margins but less than expected. The GAAP operating margin came in at 8% and the adjusted margin at 8.4% to drive earnings that missed the consensus target in both comparisons. The GAAP EPS of $1.53 missed the consensus by $0.75 while the adjusted $2.25 missed by a dime. 

Cracker Barrel Fundamentals Improve

Cracker Barrel's results may have missed the consensus targets but the company's results are still sound. Not only that, but the company is using its cash flow to improve the balance sheet and improve the fundamental outlook as well. The company was able to refinance and pay down debt over the quarter leaving total debt at just over $325 million. This is down 60 million or nearly 16% from the end of the last fiscal year and helps to free up cash flow. With the new dividend payment running at roughly 60% of the consensus earnings estimate for fiscal 2023, that is good news indeed.

Chief Executive Officer Sandra B. Cochran said, "Despite the well-known headwinds that the industry continues to face with respect to staffing, commodity and wage inflation, and the resurgence of the pandemic, we were pleased that our fourth quarter profitability continued to trend positively from the third quarter and that our off-premise sales, retail business, and Maple Street Biscuit Company concept continued to outperform.”

The Technical Outlook: Cracker Barrel Hits Bottom

Shares of Cracker Barrel fell about 5% in the wake of the earnings report but the price action since then is all bullish.  The market opened with price action sitting at a key support level that has since been confirmed. Assuming that the candle is able to close at or near the high of the day or higher, we're looking at a double double-bottom. Close inspection of the chart will reveal a small double bottom In August that led to a rally in September that is now retesting support again with another quick double-tap at support.

In our view, this is a strong indication of support and consistent with the outlook for revenue and earnings in the coming year. Even with headwinds, Cracker Barrel should see full-year revenue at or above 2019 levels with comparable levels of earnings. Assuming shares of Cracker Barrel are able to maintain support at current levels we see the stock moving up to retest resistance at the $140 level before moving up to retest resistance at the $145 level and then possibly moving higher later in the year. 

This Is The Bottom For Cracker Barrel

Should you invest $1,000 in Cracker Barrel Old Country Store right now?

Before you consider Cracker Barrel Old Country Store, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Cracker Barrel Old Country Store wasn't on the list.

While Cracker Barrel Old Country Store currently has a "Reduce" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Cracker Barrel Old Country Store (CBRL)
4.0868 of 5 stars
$56.38+0.9%9.22%15.03Reduce$76.57
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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