Cracker Barrel fiscal 1Q net income falls on costs

Friday, November 23, 2012, Vol. 36, No. 47

LEBANON (AP) - Cracker Barrel Old Country Store Inc. said Thursday its fiscal first-quarter net income fell 3 percent, pulled down by severance costs and expenses related to a proxy fight with one of its largest shareholders.

For the quarter ended Nov. 2, the restaurant chain earned $23.2 million, or 97 cents per share, down from $23.8 million, or $1.03 per share, in the same quarter last year.

During the recent quarter, Cracker Barrel fought off an attempt by Biglari Holdings Inc., which owns the Steak 'n Shake and Western Sizzlin restaurant chains, to elect two of its nominees to the company's board.

Sardar Biglari, who has an 18 percent stake in the company, has been pressing for changes in the company's board for some time. He was seeking a seat for himself and the vice chairman of his firm, but shareholders voted in favor of the company's slate of nominees instead.

Cracker Barrel said that excluding severance and proxy cont est expenses, it posted adjusted earnings of $1.08 per share.

Revenue rose 5 percent to $627.5 million from $598.4 million.

Analysts, on average, expected a profit of $1.06 per share on $629.7 million in revenue, according to a FactSet poll.

Cracker Barrel said its revenue at restaurants open at least a year increased 3.3 percent. The metric is a key measure of a retailer's health, because it excludes revenue at stores that recently opened or closed.

The average check size grew 2.5 percent, helped by a 2 percent increase in average menu prices. Restaurant traffic increased 0.8 percent.

Revenue at the company's retail stores open at least a year increased 1.6 percent. Cracker Barrel opened four new stores during the quarter. It operates 621 locations in 42 states.

Cracker Barrel backed its previous full year guidance, saying it still expects to post an adjusted income of $4.50 to $4.70 per share on $2.6 billion to $2.65 billion in revenue. A nalysts expect a profit of $4.68 per share on $2.63 billion in revenue.

The company also projected fiscal second-quarter income of between $1.22 and $1.27 per share, below average analysts' predictions of $1.28 per share.