UPDATE 1-Cracker Barrel Q3 EPS beats Street

* Q3 EPS $0.52 beats est $0.44

* Narrows 2009 adj EPS outlook

* Sees lower proceeds from sale-leaseback

May 27 (Reuters) - Cracker Barrel Old Country Store Inc (CBRL.O) posted a higher-than-expected quarterly profit, helped by better cost-control, and said it expects lower proceeds from the sale-leaseback of its retail distribution center and 15 stores.

It expects to generate about $53 million to $54 million from the sale, compared to its earlier estimate of $55 million to $60 million.

The company will use the sale proceeds and excess cash flow from operations to reduce outstanding debt.

The restaurant operator expects 2009 income from continuing operations of $2.70 and $2.90 a share, compared with its prior view of $2.65 to $3.00 a share.

Analysts were looking for $2.75 a share for the period.

The company expects 2009 revenue to be flat to a drop of 0.5 percent.

For the third quarter ended May 5, net income was $12.0 million, or 52 cents a share, compared with $10.4 million, or 46 cents a share, a year earlier.

Revenue was up marginally at $567.6 million.

Analysts on average were expecting earnings of 44 cents a share, before special items, on revenue of $568.5 million, according to Reuters Estimates.

Shares of the Lebanon, Tennessee-based company closed at $31.48 Tuesday on Nasdaq. (Reporting by Mihir Dalal in Bangalore; Editing by Anne Pallivathuckal)