With A -8.6% Earnings Drop, Did Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) Really Underperform?

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Measuring Cracker Barrel Old Country Store, Inc.'s (NASDAQ:CBRL) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess CBRL's recent performance announced on 01 February 2019 and compare these figures to its historical trend and industry movements.

See our latest analysis for Cracker Barrel Old Country Store

Commentary On CBRL's Past Performance

CBRL's trailing twelve-month earnings (from 01 February 2019) of US$218m has declined by -8.6% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 13%, indicating the rate at which CBRL is growing has slowed down. Why could this be happening? Well, let's look at what's transpiring with margins and whether the entire industry is feeling the heat.

In terms of returns from investment, Cracker Barrel Old Country Store has invested its equity funds well leading to a 35% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 15% exceeds the US Hospitality industry of 6.5%, indicating Cracker Barrel Old Country Store has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Cracker Barrel Old Country Store’s debt level, has increased over the past 3 years from 23% to 24%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 82% to 64% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research Cracker Barrel Old Country Store to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for CBRL’s future growth? Take a look at our free research report of analyst consensus for CBRL’s outlook.
2. Financial Health: Are CBRL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 01 February 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.