Cracker Barrel is getting boozy and analysts say millennials will come for the mimosas

Cracker Barrel Old Country Store Inc. has expanded its menu test of beer, wine and mimosas to 80 restaurants from 20, according to Truist Securities, which thinks the addition could be a meaningful sales driver. "We believe the addition of beer, wine and mimosas could help attract millennial consumers and boost its average check," analysts wrote in a note. Alcohol is offered in 53 of 58 Florida locations, six of 37 locations in Kentucky and 21 of 51 restaurants in Tennessee. Soft drinks and lemonade at Cracker Barrel is priced between $2.59 and $2.79, considerably less than the price for alcohol. Wine and mimosas, for example, are priced at $5.99. "One reason management gave in to launching its alcohol initiative is to 'reduce the veto vote especially during weekend dinner,'" analysts wrote. Truist rates Cracker Barrel stock buy with a $133 price target. "We expect Cracker Barrel's alcohol mix to be far lower than casual dining competitors, due to its not having a bar, generating ~40% of sales from travelers, and not offering a full selection of alcoholic drinks," analysts said. "However, the potential to expand its demographic appeal and its low check should drive a meaningful sales contribution, in our view, with potential upside to our estimate." Cracker Barrel stock is down 20.7% for the year to date while the S&P 500 index is up 7.7% for the period.

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