Cracker Barrel Tops Views in 3Q, Raises Guidance, Dividend

Cracker Barrel (NASDAQ:CBRL) impressed Wall Street on Monday by revealing a stronger-than-expected 30% jump in fiscal third-quarter earnings, boosting its profit guidance and hiking its dividend by 50%.

Shares of the restaurant chain advanced about 4% in premarket trading on the bullish developments.

Cracker Barrel said it earned $24.6 million, or $1.02 a share, last quarter, compared with a profit of $19 million, or 81 cents a share, a year earlier. Analysts had called for EPS of 94 cents.

Revenue rose 5.2% to $640.5 million, topping the Street’s view of $631 million. Operating margins expanded to 6.9% from 6.4%.

Cracker Barrel said its same-store restaurant sales jumped 3.1% last quarter and same-store retail sales increased 5.5%. Comparable store traffic was up 0.7%.

“Driven by strong sales, traffic and operational performance, our earnings growth for the third quarter exceeded our expectations,” CEO Sandra Cochran said in a statement. “We remain encouraged by our results and look to build on our successes in the fourth quarter and into the next fiscal year."

Looking ahead, management upgraded its full-year non-GAAP EPS forecast to $4.75 to $4.85, compared with consensus calls from analysts for $4.79. Revenue is seen ranging between $2.6 billion and $2.65 billion, which is in line with the Street’s view of $2.63 billion.

In another show of confidence, Cracker Barrel raised its dividend to 75 cents a share from 50 cents a share previously. The dividend is payable on August 5 to shareholders of record as of July 19.

At the same time, Cracker Barrel said it paid down about $125 million of long-term debt, cutting its projected annual interest expense by $25 million, or 70 cents a share. The company expects to recognize a gain of 17 cents per share during its fourth quarter.

Shares of Lebanon, Tenn.-based Cracker Barrel rallied 3.97% to $93.01 in premarket trading on Monday, putting them on track to extend their 39% surge so far this year.