Cracker Barrel Old Country Store (CBRL) recently hit a new 52-week high on the company’s better than expected Q2 results from late February and rising estimates.

Company Description

Cracker Barrel Old Country Store operates 591 breakfast restaurants and retail concepts in the United States. The company was founded in 1969 and has a market cap of $1.03 billion.

Second-Quarter Results

Sales for the quarter were basically flat from last year at $633 million. But earnings came in much better than expected at $1.15, 28% ahead of the Zacks Consensus Estimate. The company has been very consistent over the last year, beating in each quarter by an average of 21%.

Cracker Barrel’s same-store sales were down 3% from last year, but the company countered the lower revenue volume with a 2.4% average menu price increase. Operating margin was also up, climbing 1.6% to 7.8%, which helped the company increase its net cash flow from operating activities in the first half of the year by $36.4 million to $86.3 million.

Cracker Barrel has also tempered its growth in light of the weakened consumer environment, opening two new stores during the quarter and three in the first quarter.

Cracker Barrel is also working on its balance sheet, paying down $41 million in long term debt during the quarter while repurchasing 205,000 shares.

Estimates Jump

The better than expected Q2 results sent estimates higher, with the current year adding 26 cents to $3.51. The next-year estimate is up 32 cents in the same time to $3.87, a solid 10% growth projection.

Valuation

Shares of CBRL still have value in spite of recent gains, trading with a forward P/E multiple 13X, a discount to the overall market.

The Chart

CBRL jumped above a short-term level of resistance just above $41 on the good quarter and has been upward bound since, posting a number of new 52-week highs. Take a look below.

Zacks Investment Research

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