"Fiscal 2007 is a transition year for CBRL," Michael A. Woodhouse, CBRL's chairman, president and CEO said. "We are totally focused on driving increased traffic and retail sales to improve operating results in our stores."
The Lebanon, TN restaurant and gift-shop owner, which operates 551 Cracker Barrel locations in 41 states, sold off its Logan's Roadhouse chain for $486 million in the second quarter of 2007, helping to more than triple quarterly earnings. Company officials say the firm has also spent $950 million to repurchase a total of 22 million shares, or approximately 47% of the shares outstanding, in the past year as part of that restructuring effort.
The plan appears to already be paying off. Net income for the quarter ended Jan. 26 jumped to $102.5 million, or $2.88 per share, about $61 million more than the $30.8 million, or 61 cents per share of net income earned during the same period a year earlier. Revenue during the quarter was also up by 4% to $612.1 million, from $586.7 million in last year's second quarter.
Comparable-restaurant sales grew slightly by 0.5% while same store sales at the firm's retail outlets increased 5.5%. The company says comparable restaurant sales were affected by higher hourly wages and bonuses, advertising expenses, and retail costs of goods, which offset the benefit of the positive sales and lower food costs and utilities. The net result was a 40 basis point reduction in operating margins, the company said.
For fiscal 2007, 19 new Cracker Barrel store openings are expected to help boost total revenues 6.5% to 7.5% with comparable restaurant sales expected to increase 1% to 2% and comparable store sales projected to rise 5% to 6%.
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