Cracker Barrel Old Country Store posted a profit of $37.1 million in its fiscal second quarter, an increase of 5 percent from the figure of a year ago. Per diluted share and adjusted for the costs of last fall's proxy fight with investor Sardar Biglari, profits climbed to $1.56, up 9 percent from last year's Q2.
The quarter's sales were severely hamstrung by the severe winter weather. After slipping only slightly during November, same-store sales dropped 4.8 percent in December and 3.7 percent in January, while the quarter as a whole concluded down 2.9 percent. CEO Sandy Cochran and CFO Larry Hyatt estimate that weather lowered same-store sales by 2.5 percent over the course of the past three months.
On a call with analysts and investors, Cochran said she was "pleased with our ability to manage through a challenging period" and pointed to the rising popularity of some of Cracker Barrel's newer menu items that are more focused on good nutrition. Also helping the bottom line was a 3 percent year-over-year drop in labor costs and a drop of almost $6 million in interest expenses. That helped operating margins tick up to 8.4 percent from 8.1 percent a year earlier.
Cochran and Hyatt affirmed their 2014 profit guidance, which is a range of $5.60 to $5.80 per diluted share. Compared to their outlook in November, they also have firmed up their operating margin target — 8 percent versus a range of 7.8 percent to 8 percent — but trimmed their same-store restaurant sales outlook to a range of 1 to 2 percent from 2 to 3 percent.
At about 11:45 a.m., shares of Cracker Barrel (Ticker: CBRL) were up 1 percent to $100.40. They have given up about 15 percent in the past three months but are still up 50 percent year over year.