Industry Overview - The restaurant industry in 2025 is facing challenges such as elevated labor costs, cautious consumer spending, and ongoing food inflation [1] - While some segments show stable dining demand, the broader industry is lagging due to discretionary income pressure and changing customer preferences [2] - Many restaurant stocks have underperformed, leading to increased selectivity among investors regarding capital allocation [2] Outperforming Chains - Several restaurant chains are outperforming the market, showing strong earnings, solid same-store sales growth, and continued unit expansion [3] - Key factors for these outperformers include robust brand loyalty, digital innovation, and pricing power [3] Investment Qualities - Disciplined cost controls, enhanced loyalty ecosystems, and scalable business models are increasingly valuable in the current economic environment [4] - Investors are recognizing that not all restaurant stocks are equal, with some better positioned to thrive [4] Specific Company Performances - Cracker Barrel Old Country Store, Inc. (CBRL) has gained 15.5% this year, compared to the industry's rise of 0.3%, and has posted four consecutive quarters of positive comparable sales [9][10] - Red Robin Gourmet Burgers, Inc. (RRGB) shares surged 64% in the last three months, contrasting with the industry's 3.2% decline, benefiting from menu innovation and improved hospitality standards [8][12] - Shake Shack Inc. (SHAK) has seen an 8.3% gain year-to-date and a 46.9% increase in the last three months, with plans to open 45-50 new stores in 2025 [14][15]

Market Overview - The first half of 2025 experienced increased volatility and uncertainty due to President Trump's tariffs and a faster-than-expected cooling of inflation, leading to market recovery [1] - Recent months have shown favorable market conditions with easing trade tensions and a reduction in the Middle East crisis [1] Stock Performance and Recommendations - Optimism regarding artificial intelligence is expected to continue supporting stock prices, particularly in technology sectors [2] - Cooling inflation raises expectations for potential rate cuts starting in September 2025, contributing to a positive market outlook [2] - Stocks such as Cracker Barrel Old Country Store (CBRL), BGSF, ArcBest Corporation (ARCB), Cardinal Health (CAH), and AutoNation (AN) are recommended for monitoring as the second half of 2025 begins [2][6] Screening Strategy - A screening strategy has been developed to identify stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks [3] - The price/sales ratio is included as a valuation metric, focusing on companies with strong top-line performance [3] Screening Criteria - The top 75 companies with net upgrades in broker ratings over the last four weeks are identified [4] - The top 10 stocks with the highest percentage change in earnings estimates for the upcoming quarter are highlighted [4] - Companies in the bottom 10% of price-to-sales ratios are included for better valuation [4] Company Highlights - Cracker Barrel is focusing on menu innovation and pricing strategies to drive growth, introducing new offerings to attract customers [5] - BGSF has seen a 25% increase in shares over the past month and has a Zacks Rank 1, with earnings estimates rising over 300% in the last 60 days [7] - ArcBest is improving productivity and service quality, expecting a 52.1% increase in earnings per share for 2026 compared to 2025 [8] - Cardinal Health is undergoing strategic improvements to revitalize its business model, with its Medical segment expected to drive growth [9][10] - AutoNation's diversified product portfolio and strategic acquisitions support its market position, currently holding a Zacks Rank 3 [11]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling even higher, capitalizing on established price movements [1] Company Summary: Cracker Barrel Old Country Store (CBRL) - CBRL currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook based on historical performance of similar ranked stocks [3] - Over the past week, CBRL shares have increased by 14.48%, significantly outperforming the Zacks Retail - Restaurants industry, which saw a mere 0.03% increase [5] - In a longer time frame, CBRL shares have risen by 48.93% over the past quarter and 34.02% over the last year, while the S&P 500 only increased by 5.61% and 10.35%, respectively [6] - The average 20-day trading volume for CBRL is 1,181,595 shares, indicating a bullish trend as the stock is rising with above-average volume [7] Earnings Outlook - Recent earnings estimate revisions for CBRL show a positive trend, with three estimates moving higher and none lower over the past two months, raising the consensus estimate from $2.82 to $3.10 [9] - For the next fiscal year, three estimates have also increased with no downward revisions, further supporting the positive outlook for CBRL [9] Conclusion - Given the strong momentum indicators and positive earnings outlook, CBRL is positioned as a promising investment opportunity, making it a stock to consider for near-term gains [11]

Industry Overview - The restaurant industry has faced disappointment over the past three months, with industry stocks collectively slipping 2%, while the S&P 500 advanced 5.5% [1] - High costs and sluggish foot traffic continue to pressure margins and momentum within the industry [1] Traffic and Pricing Challenges - A rapid increase in menu prices is the primary reason behind the erosion of customer traffic, leading to challenges in maintaining customer counts as consumers express frustration with rising prices [2] Standout Performers - Despite the overall industry decline, Cracker Barrel Old Country Store, Inc. (CBRL) has increased by 46.2%, Shake Shack Inc. (SHAK) by 41.7%, and Wingstop Inc. (WING) by 62.6% over the same period, driven by brand loyalty, strategic innovation, and investor optimism [3] Company-Specific Insights Cracker Barrel - Cracker Barrel is benefiting from menu innovation, digital initiatives, and strategic remodels, with a 1% increase in comparable-store restaurant sales in the fiscal third quarter, marking the fourth consecutive quarter of positive growth [8] - Earnings estimates for fiscal 2025 and 2026 have risen by 9.9% and 8.4% to $3.10 and $3.48 per share, respectively, indicating strong momentum [9] Shake Shack - Shake Shack's growth is driven by enhanced operations, menu innovation, and store openings, with plans to open 45-50 company-operated Shacks this year [11] - Earnings estimates for 2025 and 2026 have been revised upward by 6.3% and 9.6% to $1.34 and $1.71 per share, respectively [12] Wingstop - Wingstop is experiencing growth from expansion efforts and a new kitchen operating platform, with international expansion becoming a significant growth driver [14] - Earnings estimates for 2025 and 2026 have seen upward revisions of 6.8% and 5% to $3.90 and $5.03 per share, respectively [16] Summary of Opportunities - Cracker Barrel, Shake Shack, and Wingstop are demonstrating strong brand execution and strategic innovation, trading above their 50-day moving averages, indicating solid technical strength [17] - Rising earnings estimates and clear growth strategies position these stocks as compelling opportunities despite a challenging macroeconomic backdrop [18]

Group 1 - Cracker Barrel Old Country Store (CBRL) is currently ranked 1 (Strong Buy) in the Zacks Rank system, indicating a positive earnings outlook [3] - The Zacks Consensus Estimate for CBRL's full-year earnings has increased by 8.5% over the past three months, reflecting stronger analyst sentiment [4] - CBRL has returned 14.2% year-to-date, significantly outperforming the average return of 3.2% for the Retail-Wholesale sector [4] Group 2 - Cracker Barrel belongs to the Retail - Restaurants industry, which is currently ranked 158 in the Zacks Industry Rank, with stocks in this group having lost about 0.9% year-to-date [6] - In comparison, Walgreens Boots Alliance (WBA), another outperforming stock in the Retail-Wholesale sector, has returned 22.1% year-to-date and has a Zacks Rank of 2 (Buy) [5][7] - The Retail - Pharmacies and Drug Stores industry, where WBA is categorized, has seen a year-to-date increase of 21.8% [7]

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potenti ...

Investors might want to bet on Cracker Barrel Old Country Store (CBRL) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and ...

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuati ...

Core Viewpoint - Cracker Barrel Old Country Store, Inc. has announced the upsizing and pricing of its offering of $300 million aggregate principal amount of 1.75% convertible senior notes due 2030, increasing from a previously announced $275 million [1] Group 1: Offering Details - The notes will accrue interest at a rate of 1.75% per annum, payable semi-annually starting March 15, 2026, and maturing on September 15, 2030 [2] - The initial conversion rate is set at 13.8455 shares of common stock per $1,000 principal amount of notes, equating to an initial conversion price of approximately $72.23 per share, representing a premium of about 32.5% over the last reported sale of $54.51 per share on June 10, 2025 [2] - The aggregate principal amount of the notes may be increased by an additional $45 million if the initial purchasers exercise their option [1][5] Group 2: Use of Proceeds - Cracker Barrel estimates net proceeds from the offering to be approximately $290.1 million, or $333.9 million if the option for additional notes is fully exercised [5] - Approximately $145.9 million of the net proceeds will be used to repurchase $150 million of outstanding 0.625% convertible senior notes due 2026 [5] - Remaining proceeds will be allocated for general corporate purposes, including potential repayment of existing indebtedness [5] Group 3: Redemption and Repurchase Conditions - The notes are redeemable for cash at Cracker Barrel's option starting September 15, 2028, under certain conditions [3] - In the event of a "fundamental change," noteholders may require Cracker Barrel to repurchase their notes for cash [4] Group 4: Capped Call Transactions - Cracker Barrel has entered into capped call transactions intended to reduce potential dilution upon conversion of the notes, with an initial cap of approximately $87.22, representing a 60% premium over the last reported sale price [6] - If additional notes are sold, a portion of the net proceeds will be used for further capped call transactions [7] Group 5: Market Activity and Impact - The option counterparties may purchase shares of Cracker Barrel's common stock or enter into derivative transactions, which could influence the market price of the stock and notes [8][10]

Core Insights - Cracker Barrel reported positive same-store sales in Q3 FY 2025, indicating strong consumer demand and effective operational strategies [1] - The company has formed fresh strategic partnerships, which may enhance its market position and operational efficiency [1] - Menu upgrades have been implemented, likely aimed at attracting new customers and retaining existing ones [1]