Lebanon, Tennessee-based Cracker Barrel Old Country Store, Inc. (CBRL) recently decided to hike its quarterly dividend by 15 cents to 40 cents per share. This translates into a 60.0% increase from the prior dividend. The dividend will be paid on August 6, 2012 to the stockholders of record as of July 20, 2012.
Earlier, the company increased the quarterly dividend by 3 cents to 25 cents per share, reflecting a 13.6% hike from the prior dividend. The dividend was paid on November 7, 2011 to the stockholders of record as of October 21, 2011.
Cracker Barrel remains dedicated toward maintaining a balanced approach of capital allocations by debt repayment, brand enrichment and returning capital to shareholders through dividends and share repurchases.
Cracker Barrel possesses a strong balance sheet and is well placed financially. At the end of the second quarter, the company’s cash and cash equivalent more than doubled to $119.4 million as compared to $52.3 million in fiscal 2011. We believe that the company has enough cash and cash equivalents to provide optimum shareholder value.
We appreciate Cracker Barrel's efforts to consistently enhance long-term shareholder value even amidst economic downturn. We believe that an increase in dividend payment affirms the company’s optimistic outlook and depicts that it is heading toward strong future growth.
In addition, Cracker Barrel also reported the highlights of its upcoming third quarter, 2012. The comparable restaurant traffic inched up 0.6%, including a 2.5% increase in average check. Restaurant and retail sales improved 3.1% and 0.4%, respectively.
Established in 1969, Cracker Barrel, a chain of combined restaurant and gift stores in the US, operates 611 company-owned locations in 42 states. The company undertakes several initiatives like media spending, refined menu and pricing strategies and improved restaurant operations and services to drive traffic and sales.
We presently have a Neutral recommendation on Cracker Barrel, which holds a Zacks #3 Rank, signifying a short-term Hold rating. We also have a Zacks #3 and a Neutral recommendation on Denny’s Corporation (DENN), a close peer of Cracker Barrel Old Country Inc.
CRACKER BARREL (CBRL): Free Stock Analysis Report
DENNY’S CORP (DENN): Free Stock Analysis Report
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