(Adds background, analyst’s comments, updates share movement)
By Shivani Singh
BANGALORE, July 1 (Reuters) - CBRL Group Inc (CBRL.O), parent of the Cracker Barrel Old Country Store restaurants and gift shops, reported lower restaurant same-store sales in June and cut its 2008 outlook, sending its shares down by as much as 16 percent to a 52-week low.
“We will not reach the earnings level that we previously forecast for fiscal 2008 given the continuing negative pressures on consumers”, Chief Executive Michael Woodhouse said in a statement.
Restaurants have been hurt as consumers deal with the high cost for gas and food items, coupled with a weak economy that has led to cutting back on dining out.
Summer is going to be difficult for CBRL with gasoline touching over a $4 a gallon and people travelling less, KeyBanc Capital Markets analyst Lynne Collier said by phone from Dallas, Texas. She expects fall to be slightly better.
CBRL, which was overly optimistic that traffic will not decline in summer, will likely report flattish to negative same-store sales over the next several months, Collier said.
For the first time in a decade, fewer Americans will be hitting the road for Independence Day holiday weekend as they feel pinched by a higher gasoline price, auto and travel group AAA said last week.
The company, which operates 576 Cracker Barrel Old Country Store restaurants and gift shops in 41 states, reported a 1.2 percent decrease in June restaurant same-store sales. Retail same-stores sales for June increased 0.2 percent.
Lebanon, Tennessee-based CBRL, which cut its 2008 outlook for the third time since September 2007, now expects earnings from continuing operations of $2.77 to $2.87 share for the year, down from its prior view of $3.02 and $3.12 a share.
It forecast total revenue from continuing operations to grow about 1.5 percent from a year ago. It had previously estimated revenue growth of 2 percent.
Analysts on average were expecting earnings of $3.04 per share, before special items, on revenue of $2.40 billion, according to Reuters Estimates.
Following the company’s outlook revision, analysts average estimates have changed to a profit of $2.88 a share, before special items, on revenue of $2.39 billion.
CBRL shares, which were trading at more than 2 times their 50-day moving average volume, fell more than 11 percent to $21.81 in afternoon trade on Nasdaq. They dropped 16 percent to a 52-week low of $20.58 earlier in the session. (Editing by Himani Sarkar)