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Cracker Barrel fiscal 1Q earnings rise slightly

November 22, 2011

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LEBANON, Tenn.—Restaurant operator Cracker Barrel Old Country Store Inc.'s fiscal first-quarter earnings inched up slightly, helped by new store growth that balanced declines in revenue from stores and restaurants open at least a year.

The Lebanon, Tenn., company said Tuesday that it earned $23.8 million, or $1.03 per share, in the three months that ended Oct. 28. That compares to earnings of $23.7 million, or $1.01 per share in last year's quarter.

Revenue fell slightly to $598.4 million.

Analysts surveyed by FactSet expected, on average, earnings of $1.05 per share on $598.5 million in revenue.

The operator of Cracker Barrel restaurants and gift shops said it took a charge of 6 cents per share in the quarter related to a proxy battle with investment firm Biglari Holdings Inc., its biggest shareholder. Biglari, based in San Antonio and controlled by Sardar Biglari, also owns the Steak `n Shake and Western Sizzlin restaurant chains.

Revenue from Cracker Barrel restaurants and retail locations open at least a year was down 1.6 percent and 1.3 percent, respectively.

The measure is considered a key gauge of a retailer's fiscal health because it excludes stores that open and close during the year. Restaurants have suffered as consumers eat out less, holding on to habits formed during the recession.

Restaurant traffic at locations opened at least a year fell nearly 4 percent, but that decline shrunk in each month of the quarter, and the average check went up 2 percent.

Cracker Barrel opened three new stores in its first fiscal quarter and now has 608, counting two that have opened since the quarter ended.

For the full fiscal year, Cracker Barrel expects net income of $4.10 to $4.25 per share, which it announced earlier this month. That excludes proxy fight expenses, which Cracker Barrel estimates to be between 11 cents and 14 cents per share.

Analysts expect, on average, earnings of $4.21 per share.

Company shares fell 3 percent, or $1.43, to $44.50 in Tuesday morning trading.