Cracker Barrel Old Country Store (CBRL) reports fourth-quarter loss, top revenue estimate

Cracker Barrel Old Country Store (CBRL) came out with quarterly loss of $0.85 per share versus the Zacks Consensus Estimate of a loss of $0.55. For comparison, earnings per share were $2.70 a year earlier. These numbers have been adjusted for one-off items.

This quarterly report showed an earnings surprise of -54.55%. A quarter ago, it was expected that this restaurant operator would post a loss of $4.72 per share when it actually produced a loss of $6.81, delivering a surprise of -44.28%.

The company has topped consensus EPS estimates twice over the last four quarters.

Cracker Barrel, which belongs to the Zacks Retail – Restaurants industry, posted revenues of $495.07 million for the quarter ended July 2020, surpassing the Zacks Consensus Estimate by 2.36%. For comparison, revenues from a year ago amounted to $787.10 million. Over the last four quarters, the company has topped consensus revenue estimates only once.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Cracker Barrel shares have lost about 10.2% since the beginning of the year compared to the S&P 500’s gain of 4.7%.

What’s next for Cracker Barrel?

While Cracker Barrel has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for Cracker Barrel was mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.47 on $608.40 million in revenues for the coming quarter and $5.08 on $2.77 billion in revenues for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Retail – Restaurants industry is currently in the top 37% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

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