Company Overview
Cracker Barrel Old Country Store, Inc. develops and operates the Cracker Barrel Old Country Store concept across the United States, a business model that integrates full-service restaurants with a dedicated gift shop. This company operates within the Consumer Cyclical sector and specifically targets the Restaurants industry, positioning it as a discretionary spending play sensitive to consumer economic cycles. The firm maintains a substantial operational footprint employing 76,730 individuals and holds a total market capitalization of $597.67M. Its annual revenue for the trailing twelve months stands at $3.36B, figures that indicate the company generates significant top-line volume despite its relatively modest market cap. This discrepancy between the $3.36B in revenue and the $597.67M market cap suggests the market is pricing in significant headwinds or future contraction relative to the current asset size. The scale of operations is further evidenced by the workforce size, which supports a widespread physical presence necessary to sustain the revenue stream reported.
Financial Health
For the trailing twelve months, the company reported revenue of $3.36B, a net income of -$4,012,000, and an EBITDA of $130.87M. The substantial gap between the positive EBITDA of $130.87M and the negative net income of -$4,012,000 reveals a cost structure where non-operating expenses, such as interest payments on debt, are eroding core profitability. The firm reported free cash flow of -$47,857,248, indicating that cash outflows for capital expenditures and working capital exceed operating cash generation, which limits financial flexibility for strategic acquisitions or share buybacks. Margin analysis shows a gross margin of 31.8%, an operating margin of 0.1%, and a profit margin of -0.1%, illustrating that while the company retains significant value from sales, operating overhead and interest costs nearly eliminate operating income before taxes and non-operating items. The balance sheet appears highly leveraged with total debt of $1.21B against only $8.57M in cash, resulting in a debt-to-equity ratio of 283.31%. Liquidity is constrained further by a current ratio of 0.49, indicating that current assets are insufficient to cover current liabilities without external financing or asset sales. Return on Equity stands at -0.9% and Return on Assets at 0.2%, metrics that reveal management is currently destroying shareholder value rather than generating returns on the capital deployed in the business.
Valuation Assessment
The trailing P/E ratio is listed as N/A due to the negative net income, while the forward P/E is 50.15, implying that the market is valuing the company based on projected earnings rather than current profitability. The price-to-book ratio is 1.40, suggesting the market prices the company at a 40% premium over its book value, a valuation multiple that often persists in cyclical industries despite current earnings losses. Alternative valuation metrics include a price-to-sales ratio of 0.18 and an EV/EBITDA of 13.72, figures that suggest the stock is priced at a low multiple of revenue but at a high multiple of enterprise value relative to cash flow. The 52-week high is $71.93 and the 52-week low is $24.85, placing the current price trading significantly below the recent highs and within the lower to middle range of its annual volatility band. The stock carries a beta of 1.22, which indicates that the share price is expected to be 22% more volatile than the broader market index during periods of rising or falling market conditions.
Growth & Income
Revenue growth year-over-year is -7.9% and earnings growth year-over-year is -94.2%, demonstrating that earnings are contracting at a rate far faster than revenue is declining, likely due to the compounding effect of interest expenses on the heavy debt load. The company pays a dividend with a yield of 3.7% and a payout ratio of 135.1%, a situation where dividends are being paid out of cash reserves or debt financing rather than current earnings, making the payout unsustainable if cash flow does not reverse soon. Given the negative net income and high payout ratio, the company cannot reinvest earnings into growth via dividends but is instead distributing capital it does not currently generate from operations. The overall growth and income profile presents a mixed picture of high current yield offset by severe contraction in both top-line sales and profitability.