Cracker Barrel Old Country Store, Inc. CBRL opened its latest outlet in Tualatin, OR, on Apr 17. This store marks Cracker Barrel’s debut on the West Coast and is one of the four expected openings in the Portland area.
Cracker Barrel's entry into the Portland area marks a key expansion of the brand’s footprint. This is because, currently, a majority of its stores (roughly 57%) are heavily concentrated in the Southern region of the country.
At the new store, guests will be able to enjoy breakfast all day, along with lunch and dinner options, including the brand’s famous homemade chicken n' dumplins. Also, they might indulge into the Wholesome Fixins menu of classic country meals with a lighter twist. Meanwhile, customers may also opt to shop for toys, games, food items, apparel, accessories and other unique items in the old country store.
Notably, at present, the company operates more than 640 Cracker Barrel outlets across the nation and anticipates adding eight stores throughout fiscal 2017.
However, Cracker Barrel loses out in terms of international presence. While, the other restaurant chains like Yum! Brands, Inc. YUM, McDonalds Corporation MCD and Papa John’s International, Inc. PZZA are following aggressive global expansion policies, Cracker Barrel seems to be weak on this front.
Moreover, driven by the soft fiscal second-quarter sales results, a modest expectation for traffic improvement and planned pricing decelerations, the company anticipates highly modest comparable store restaurant sales growth for fiscal 2017. Additionally, comparable store retail sales are expected to decline about 2% in the fiscal year, reflecting further caution regarding the outlook on the retail environment.
Resultantly, shares of the company have widely underperformed the Zacks categorized Retail-Restaurants industry year to date. While shares of Cracker Barrel recorded a decline of 6.1%, the industry gained nearly 2%.
Nevertheless, the company is focused on increasing its brand’s relevance at both restaurants and retail stores through enhanced marketing efforts, menu innovation and new retail merchandise. Seasonal promotions and improving guest experiences are also expected to drive incremental sales for the company. Meanwhile, continuous expansion plans of the company reinstate our belief in the brand’s demand across the country.
Cracker Barrel currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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