S&P lowers Cracker Barrel outlook to negative

Standard & Poor's said it revised its outlook on Cracker Barrel Old Country Store Inc. to negative from stable.

The agency said it also affirmed the company's ratings, including its BB- corporate credit rating.

"The outlook revision is due to the company's weakening operating performance," said S&P credit analyst Jackie E. Oberoi.

Credit metrics are weak for the rating and the company's EBITDA cushion over financial covenants narrowed to about 5% for the first quarter, the agency noted.

"While we expect the company to reduce debt from seasonal peak levels over the next quarter such that the EBITDA cushion widens to about 9%," added Oberoi, "we remain concerned that without additional debt pay-down, CBRL may have difficulty meeting financial covenants when they step down in the fourth quarter next July."

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