A summer rebound in guest traffic helped Cracker Barrel Old Country Store post better-than-expected profits in its fourth fiscal quarter — and will give President and CEO Sandy Cochran a healthy portion of good news to deliver to shareholders being wooed by activist investor Sardar Biglari.
Lebanon-based Cracker Barrel said it earned $34.7 million in the three months ended Aug. 3, almost double its year-ago number. Without the help of an extra week of sales versus 2011's Q4 and some one-time charges in each period, the year-over-year increase was 18 percent.
Driving the stronger numbers were improved guest counts — they were up almost 3 percent in July and 1.4 percent for the quarter — and a 2.4 percent average price hike that combined to lift sales 14 percent to $700 million. In addition, food costs and store operating expenses both declined as a percentage of sales, pushing up store operating income 31 percent.
In reporting its numbers, the company also said its board has authorized an increase of the company's quarterly dividend to 50 cents per share. Earlier this year, the board hiked the payout from 25 cents.
“Despite an uncertain economic backdrop, over the course of the year we continued to make tangible, measurable improvement on the six business priorities that we initiated in the first quarter,” Cochran said. “Specifically in the fourth quarter, we believe our national advertising, menu development, and strong execution from the operations team worked together to drive our third consecutive quarter of positive traffic, sales and profit.”
The earnings will give Cochran more ammunition with which to fend off Biglari, who is pushing to get two board seats at Cracker Barrel and has been saying the company needs to improve its performance. But the company last week told shareholders it is endorsing 10 sitting directors.
As of 11 a.m., shares of Cracker Barrel (Ticker: CBRL) were up more than 7 percent and were changing hands above $68 for the first time ever. Year to date, the stock has climbed 34 percent.