Shares of restaurant chain Cracker Barrel Old Country Store (CBRL) are up about 10% today to roughly $73.60 after its fiscal second-quarter profit rose 38% and handily surpassed analyst expectations. Revenue was also better than expected, while the company also raised its full-year outlook. The positive results seem to simply be down to increased business and some higher menu prices:
Traffic edged up 0.2 percent in the quarter, while the average check rose 3.1 percent. Menu prices increased, on average, about 2.6 percent…
Restaurant sales at locations open at least a year climbed 3.3 percent, while retail sales at locations open at least a year increased 3.1 percent.
Cracker Barrel Old Country Store Inc. said that bad weather lowered its traffic, restaurant and retail sales at locations open at least a year by approximately 0.3 percent.
Stephen Anderson at Miller Tabak reiterated his Buy rating for the stock in the wake of earnings, as well as his $74 price target. Anderson, who’s had a Buy on the stock since initiating coverage in October 2010, wrote:
The 3.3% gain on restaurant-level comps leaves CBRL far and away the leader among national family dining chains, beating its nearest family dining competitor by 140bps. Management is making significant strides in making its cost structure more efficient, particularly as the company implements IT-based labor and planning tools. Although some of the post-earnings enthusiasm likely will be tempered by management�s in-line EPS guidance for 3Q13 (April),�we still think there could be upside to today�s increased full-year FY13 EPS guidance, particularly as many publicly-traded restaurant companies recently have moderated their outlook for food costs in the next 12 months.
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