NEW YORK (TheStreet) -- Cracker Barrel (CBRL) shares rose Tuesday, trading more than 5% higher in the early afternoon, after the company reported earnings that beat analysts' estimates. The country store and restaurant chain saw increased sales for the quarter, and has implemented a three-year cost cutting plan.
The company posted earnings of $1.49 per share, beating analysts' estimates by 12 cents per share, while revenue came in at $683.71 million, up from last year's $643.30 million. Sales for the quarter were up 5.2% and traffic increased by 1.8%.
Cracker Barrel CEO Sandra Cochran praised the strong sales numbers, describing the company's performance as "the result of general increases in consumer spending, our strong value positioning, and the continuing success of our marketing initiatives."
The Tennessee-based chain has also raised its profit outlook for the year. The company now says it expects to earn between $6.60 and $6.70 a share, up from its earlier forecast of $6.40 to $6.50.
As well as cutting costs, Cracker Barrel has also increased prices. The average menu price is around 2.5% higher than last year, pushing the average check cost up around 3.4%. Cracker Barrel announced that it intends to pay shareholders a special dividend of $3, and raise its quarterly dividend by 10% to $1.10.
Many of Cracker Barrel's more than 630 restaurants are located along highways, and the recent trends toward lower fuel prices and longer average vehicle journeys have proven beneficial to the company's earnings outlook. The chain's executives are hoping that cost-cutting schemes will generate around $50 million in savings by 2017.
Activist investor Sardar Biglari, the chairman and CEO of Biglari Holdings (BH), pressured the chain into restructuring and streamlining the company back in April 2014. Biglari owns 20% of the Cracker Barrel, and previously suggested that the company consider a sale.