Cracker Barrel Old Country Store (CBRL) Grows Earnings Per Share; Better Same-Store Sales Than Industry

July 12, 2013

Cracker Barrel Old Country Store (CBRL) has reduced its shares outstanding by 50% to 23.5 million since 2000, increasing earnings per share while maintaining a consistent strategy of providing nondiscounted country food and retail merchandise, says Gary Bradshaw, Senior Vice President & Portfolio Manager at Hodges Capital Management.

“They stuck to their knitting of providing great-tasting country cooking at inexpensive prices, and they didn’t get into the discounts like Chili’s, T.G.I. Friday’s or Applebee’s — I call it the “T.G.I. Chilibee’s” — where you go in and get two for $20 or two for $25. Cracker Barrel never engaged in discounting, and their customers have come back week after week for the same good food. Their same-store sales have been over 3%, which is much better than the industry average,” Bradshaw said.


Bradshaw says the restaurant chain has about 625 locations along interstate highways, and it yields a dividend of about 3.26%. The store also monetizes the waiting room at the restaurants by including a retail store for T-shirts, toys and novelties.

“In addition, Cracker Barrel has a little retail store in the front of each restaurant where you can buy T-shirts, novelties and toys while you wait to be seated. They will do about $1 million of business in these retail stores. Of late, Cracker Barrel has rewarded shareholders by raising their dividend. Just this past quarter they raised it 50%, from $0.50 a share quarterly to $0.75 a share quarterly,” Bradshaw said.