Stock to watch: Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL)

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Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) in the fourth quarter of FY 17 has reported the adjusted earnings per share of $2.23, beating the analysts’ estimates for the adjusted earnings per share of $2.18 as per Zacks Investment Research. The company had reported 0.3 percent fall in the adjusted revenue growth to $743.2 million in the fourth quarter of FY 17, missing the analysts’ estimates for revenue of $750.3 million.

Moreover, the comparable store restaurant sales fell 0.8%, including a 1.7% fall in the store traffic partially offset by a 0.9% increase in average check. The average menu price increase for the fourth quarter was approximately 1.4%. The comparable store retail sales fell 4.4% for the quarter. CRBL has opened two new Cracker Barrel stores during the fourth quarter bringing the combined Cracker Barrel and Holler & Dash store count to 649 locations at fiscal year-end.

For 2018, CRBL expects full-year earnings to be $8.85 to $9 per share, and revenue is expected to be $3.1 billion.

Additionally, in FY 18 the company expects the opening of eight or nine new Cracker Barrel stores and three or four new Holler & Dash stores, as well as projected increases in comparable store restaurant sales in the range of 2.5% to 3.5%, and comparable store retail sales in the range of 0.0% to 1.0%. The Company expects the food commodity inflation of approximately 1.5% for the year. CRBL expects the operating income margin to be relatively flat to the prior year as a percent of total revenue. In addition, in FY 18 the company expects depreciation expense between $95 million and $100 million, net interest expense in the range of $16 million to $17 million; and capital expenditures of approximately $150 million to $160 million. The company expects an effective tax rate for fiscal 2018 of between 31% and 32%.

CRBL had its price objective decreased by stock analysts at Bank of America Corporation from $150.00 to $140.00. The firm currently has an “underperform” rating on the restaurant operator’s stock. Bank of America Corporation’s target price points to a potential downside of 5.67% from the company’s previous close. Zacks Investment Research has downgraded CRBL from a “hold” rating to a “sell” rating

CBRL stock has risen 3.7% in the last five days (source: Google Finance).

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