Saying it wished "to avoid expensive and protracted litigation," the Cracker Barrel unit of CBRL Group (CBRL) disclosed Thursday that it has agreed to pay $8.7 million to settle racial discrimination charges. The Lebanon company had accrued $3.5 million toward a settlement in 2001, so the final agreement will result in a new charge in the fourth quarter ended July 31 of $3.3 million, or seven cents a share.
Cracker Barrel denied charges brought by the NAACP that it had violated provisions of the Civil Rights Acts of 1866 and 1964 and other plaintiffs' allegations of violations of the Fair Labor Standards Act.
After the charge, CBRL said it earned $29.9 million, or 60 cents a share, in the fourth quarter, down from $35.5 million, or 70 cents a share, in the year-ago period. Total sales rose 4.7% to $607.5 million. Same-store sales slipped 0.6% at Cracker Barrel restaurants, fell 3.1% in Cracker Barrel retail stores, and increased 5.6% at Logan's Roadhouse restaurants (including average 3.0% price increases).
For fiscal 2004, CBRL earned $113.3 million, or $2.25 a share, up from $106.5 million, or $2.09 a share, in fiscal 2003. Total sales increased 8.3% to $2.4 billion.
CBRL expects first-quarter 2005 earnings to reflect a mid-single-digit percentage increase over the year-ago period's 56 cents a share. For the year, the company expects a mid-teens percentage gain over $2.31 a share in 2004 (excluding today's settlement charge). For the four weeks ended August 27, same-store sales at Cracker Barrel were up 1.8%; Cracker Barrel retail sales were down 1.6% and Logan's was up 3.9%.
CBRL shares settled Wednesday at $32.47. Their 52-week range is $30-$42.07.