The company, which opened a total of 14 Cracker Barrel and 17 Logan's Roadhouse stores this year, said it expects fiscal 2007 to be "a transition year" for CBRL Group as it moves into the final stages of its Logan's divesture.
News of the chain's expansion plans comes as the company reported a 4.8% drop in fourth quarter net income due to higher debt costs associated with a stock repurchase plan and a decline in sales at stores open at least a year.
Net income for the quarter ended July 28, was $35.8 million, or $1.03 per share, about $2 million less than the $37.6 million, or 74 cents per share, in net income earned in the same period a year earlier. Sales throughout the chain rose 1.7% to $671.1 million for the quarter but declined 3% at restaurants opened at least 18 months due to a drop in customer traffic, the company said.
The drop in customer traffic is reflective of many restaurant chains as consumers look to ways to cut costs due to rising gas and fuel prices. The company said net income was also hurt by higher debt costs associated with a stock repurchase plan which included a loan, taken out earlier this year, to repurchase 35% of its shares.
The fourth quarter was also the first quarter that fully reflected the firm's recent recapitalization, which reduced net income due to higher interest on additional debt, while increasing per share diluted net income as a result of a cutback in the number of outstanding shares.
"Fiscal 2006 was a difficult year from a revenue perspective due to both internal and external factors, including last fall's devastating hurricane season and the continuing pressure on consumer discretionary income as gasoline prices soared to record levels," said Michael A. Woodhouse, CBRL's chairman, president and chief executive officer. Woodhouse said the firm expects to make improvements on future results.
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