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cbrl settles discrimination suit, earnings fall UPDATE 1-CBRL settles discrimination suit, earnings fall
September 9, 2004 7:52am ET (Reuters)

(Adds outlook, details)

NEW YORK, Sept 9 (Reuters) - CBRL Group Inc. on Thursday said it would pay $8.7 million to settle a lawsuit charging discrimination and labor law violations at its Cracker Barrel Old Country Store restaurants.

The Lebanon, Tennessee-based restaurant chain also reported fiscal fourth-quarter earnings of $29.9 million, or 60 cents per share, which included a charge of 7 cents per share related to the settlement. That was down from net income of $35.5 million, or 70 cents per share, a year earlier.

Excluding the litigation costs, analysts had expected fourth-quarter earnings of 66 cents per share, according to Reuters Research. The company itself had forecast 65 cents to 68 cents per share on the same basis.

On Aug. 11, the U.S. Equal Employment Opportunity Commission sued the restaurant chain and charged that female workers were sexually assaulted and a black worker was racially offended.

In the fourth quarter, which ended July 30, total sales rose about 5 percent to $607.5 million, while same-restaurant sales, a closely watched figure in the industry, were down slightly by 0.6 percent.

CBRL, which operates 505 Cracker Barrel Old Country Store restaurants and 130 company-owned and franchised Logan's Roadhouse restaurants, said it expects first-quarter earnings to rise in the mid-single digits percent from a profit of 56 cents a share a year earlier.

For fiscal 2005, the company forecast earnings to grow in the mid-teens percent from earnings of $2.31 per share which excluded the settlement charge in 2004. It also expects revenue of $2.6 billion for the year.

Analysts are expecting 59 cents a share for the first quarter, and $2.63 a share on sales of $2.58 billion for the year. End of Story