Comparable restaurant sales increased 1.5 percent in the third quarter, including a 2.8 percent increase in average check which was partially offset by a 1.3 percent decline in comparable restaurant traffic. The average menu price increase for the third quarter was 2.5 percent, the company said.
Net income for the third quarter ended April 27, 2018, was $48.7 million compared with $46.9 million reported in the third quarter of 2017. Total revenue for the quarter was $721.4 million, representing an increase of 3.0 percent over the year-ago quarter.
Diluted earnings per share for the period were $2.03 compared with $1.95 per diluted share reported in the third quarter of 2017.
|Sandra Cochran, president, CEO and director, Cracker Barrel|
“Sales trends for the quarter reflected an improvement versus the previous quarter, and we again outperformed the industry, and we delivered third quarter earnings per share that were above our expectations,” Sandra Cochran, president, CEO and director of Cracker Barrel said during a call with analysts. “Higher commodity inflation and expenses related to our initiatives pressured operating margins, but I’m pleased with the progress that we're making.”
Cochran noted that Cracker Barrel continued to make progress on the company’s off-premise strategy which includes take-out, heat-and-serve meals, and catering.
“We've been pleased with the growth of individual To-Go, which has largely occurred organically, and in the coming quarters we’ll be testing third-party delivery as we seek to expand this part of the business,” Cochran told analysts. “In the Heat n’ Serve business, we anticipated a significant increase in sales versus prior year for our Easter offering, and we were pleased with the performance, which continues to grow. Because of the success we’ve had with our Heat n’ Serve program, we’ll be expanding it to additional occasions such as Mother’s Day.”
Speaking about the company’s catering business, Cochran said the platform allowed Cracker Barrel to launch breakfast bundles, new menu offerings conveniently bundled with complementary items. For example, the Cracker Barrel Classic bundle features ham, egg and cheese casserole, grits, sawmill gravy and biscuits along with a choice of breakfast meat and hash brown casserole or fried apples. Cochran said Cracker Barrel will begin testing additional new items exclusive to the catering business in two weeks.
“Additionally, we’ll be expanding our in-house delivery program in the coming quarters to further support our off-premise initiative,” Cochran added. “We have been and will be investing in additional marketing, technology and labor.”