slightly higher following its third quarter (April) results, Cracker Barrel (CBRL
161.23, +2.40, +1.5%) investors seem to be shrugging off the lowered fiscal
year 2018 guidance and roughly in-line comparable store sales.
Checking out the Q3 print first Cracker Barrel reported better than expected earnings of $2.03 per share on revenue growth of 3% to $721.4 mln.
Comparable store restaurant sales were up 1.5% including a 2.8% increase in average check, but partially offset by a 1.3% decrease in comparable store restaurant traffic. The average menu price increase for the quarter was about 2.5%. Comparable store retail sales increased 0.9% from the prior year quarter.
Shareholder return program
Management also announced that its Board of Directors increased the quarterly dividend by 4.2% to $1.25 per share on the company's common stock from the previous quarterly dividend of $1.20.
The Board of Directors also declared a special dividend of $3.75 per share on the company's common stock. The special dividend is payable on August 3, 2018 to shareholders of record on July 13, 2018.
In terms of guidance, Cracker Barrel now expects to report FY18 EPS between $9.30-9.40 compared to prior guidance of $9.30-9.50. The company continues to anticipate total revenue of about $3.1 bln, reflecting the expected opening of eight new Cracker Barrel stores and three new Holler & Dash Biscuit House restaurants.
Further, Cracker Barrel continues to anticipate comparable store restaurant sales growth of between 1.0-2.0% and approximately flat comparable store retail sales growth. Management now expects food commodity inflation of about 3.25% for the year versus prior expectations between 2.5-3.0%.
The company now projects an operating income margin of about 9.5% of total revenue for fiscal 2018 vs 9.5-10.0% prior. It expects depreciation expense of about $95 mln, at the low end of previous guidance; net interest expense in the range of $15-16 mln; and capital expenditures of around $150 mln, at the low end of previous guidance. The company now estimates a blended effective tax rate for fiscal 2018 of about 11%, at the low end of the previous 11-14% outlook.
Management also noted that the company's 2018 fiscal year is a 53-week year. As such, the company estimates the impact of the 53rd week to contribute earnings per diluted share of about $0.35.
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