UPDATE 2-Cracker Barrel Q4 profit tops Street; allays debt fears

* Q4 EPS $1.06 vs est $0.94

* Revenue $595.6 mln vs est $597.9 mln

* Sees FY EPS from cont ops $2.85 to $3.10

* Sees FY capex $70 mln-$75 mln

* Shares up as much as 4 percent (Recasts; adds details, analyst comments, updates stock move)

By Vidya Lakshmi

BANGALORE, Sept 15 (Reuters) - Cracker Barrel Old Country Store Inc (CBRL.O) posted a better-than-expected adjusted quarterly profit helped by cost savings, and paid down a portion of its debt allaying fears about a possible breach of covenants.

"I think that with paying down $133 million in debt this quarter, any concerns investors might have regarding leverage covenant should be evaded at this point," Keybanc Capital Markets analyst Brad Ludington said by phone.

The covenant issue became tighter back in May, but is less of an issue now, MKM Partners analyst Stephen Anderson told Reuters.

"We improved our operating margin as a result of lower food cost inflation, effective management of our operating costs, and lower general and administrative expenses," Chief Executive Michael Woodhouse said in a statement.

General and administrative expenses at Cracker Barrel fell 10 percent to $32 million during the latest fourth quarter ended July 31.

The restaurant operator, which has consistently beaten Wall Street expectations during the last one year, earned $22.8 million, or 99 cents a share, compared with $21 million, or 93 cents a share, a year earlier.

Excluding impairment and store closure charges, the company earned $1.06 a share, according to Reuters Estimates.

Revenue dropped marginally to $595.6 million.

Analysts on average were looking for a profit of 94 cents a share, before items, on revenue of $597.9 million.

The company also forecast full-year earnings from continuing operations of between $2.85 and $3.10 a share. It sees full-year 2010 revenue up between 0.5 percent and 2.5 percent over full-year 2009 revenue.