LEBANON, TENN. — Cracker Barrel Old Country Store, Inc. isn’t sweating higher egg prices — at least not in the near term. The casual dining chain, which reported a 23% increase in net income for the recent quarter, said the impact on egg prices related to the outbreak of avian influenza won’t affect the company’s results in the current fiscal year. Based on strong year-to-date sales performance, Cracker Barrel has raised its full-year outlook.
For the third quarter ended May 1, Cracker Barrel had net income of $35,317,000, equal to $1.48 per share on the common stock, up 23% from $28,728,000, or $1.21 per share, in the prior year period. Total revenue advanced 6% to $683,705,000 from $643,298,000.
“We believe our strong sales performance in the quarter was the result of general increases in consumer spending, our strong value positioning, and the continuing success of our marketing initiatives,” said Sandra Cochran, president and chief executive officer, during a June 2 earnings call with financial analysts. “Our margin improvement in the quarter reflects the ongoing implementation of our cost savings initiatives and the leverage of higher sales.”
Comparable store restaurant sales increased 5.2%, which included a 1.8% increase in traffic and a 3.4% increase in average check.
The company now expects to deliver adjusted earnings per diluted share between $6.60 and $6.70, and total revenue for the year between $2.8 billion and $2.85 billion, which includes the expected opening of six new Cracker Barrel stores through the year and comparable store restaurant sales growth of 4.5% to 5%.
Fiscal 2016 is a different story, and the company said it expects significant increases in egg prices for the year. Eggs constitute between 3% and 4% of Cracker Barrel’s commodity spend, of which about 75% are shell eggs, 20% are liquid eggs and the remaining are hard-boiled eggs.
“As we go into the 2016 fiscal year as compared to what some restaurant companies have publicly said about supply availability, we are very confident in our ability to obtain supply,” said Larry Hyatt, senior vice-president and chief financial officer. “Pricing will, of course, be significantly higher than the pricing we had paid in the 2015 fiscal year, and as to whether that drives changes in menu or changes in specific item menu pricing, I think it’s a little premature at this point to say.”
Higher menu prices, limited-time offers and new reduced-calorie offerings helped generate higher sales during the third quarter.
On the way is a new summer menu promotion, featuring strawberries and cream French toast and slow-roasted St. Louis-style ribs.Cracker Barrel’s share price was nearly 5% higher at $146.43 on June 2, up $6.64 from the previous close of $139.79.