LEBANON (AP) - Cracker Barrel Old Country Store Inc.'s fiscal second-quarter profit fell 11 percent, dragged down by increased food costs and higher expenses. But the restaurant chain lifted its full-year earnings outlook on Tuesday, citing rising sales.

Cracker Barrel has been in a proxy fight with investment firm Biglari Holdings Inc., the San Antonio-based owner of the Steak 'n Shake and Western Sizzlin restaurant chains.

Its shares rose $2.09, or 3.8 percent, to $57.72 in afternoon trading after setting a 52-week high of $59.90 earlier in the session. Its shares traded as low as $37.31 in mid-September.

Lebanon, Tenn.-based Cracker Barrel reported net income of $25.6 million, or $1.10 per share, for the quarter ended Jan, 27. That compares with earnings of $28.8 million, or $1.20 per share, in the prior-year period.

Removing proxy fight expenses, earnings were $1.20 per share. Analysts expected adjusted earnings of $1.14 per share, according to a FactSet poll.

Labor costs and related expenses, other store operating expenses and general and administrative expenses all climbed in the quarter.

Revenue rose 5 percent to $673.2 million from $640.3 million. The company's performance was helped by improved traffic, increased menu prices and a higher average check. Analysts had expected revenue of $659.2 million.

Revenue at restaurants open at least a year increased 3.5 percent. This figure is a key gauge of a restaurant operator's health because it excludes results from restaurants recently opened or closed.

Cracker Barrel has 611 company-owned restaurants in 42 states.

The restaurant operator anticipates fiscal 2012 adjusted earnings of $4.20 to $4.35 per share on revenue between $2.55 billion and $2.6 billion. Its previous guidance was for adjusted earnings in a range of $4.10 to $4.25 per share.

The company predicts third-quarter earnings of 70 cents to 75 cents p er share.

Analysts expect full-year earnings of $4.29 per share on revenue of $2.55 billion and third-quarter earnings of 72 cents per share.