LEBANON, Tenn. — Cracker Barrel’s stock dropped sharply after its new CEO admitted in an earnings call that the chain of Southern country restaurants is not as “relevant” as it used to be.
During an investors conference call on May 16, Julie Felss Masino said the restaurant chain, based out of Lebanon, Tennessee,“ was not delivering the financial results that shareholders deserve,” USA Today reported.
“Cracker Barrel is a great concept and a great company,” Masino said during the call. “But to ignite growth, we must revitalize the brand.
Cracker Barrel CEO says brand isn't relevant and needs new strategy. Here are 3 changes coming soon. https://t.co/LWafBsuCrn
— CBS News (@CBSNews) May 24, 2024
“We’re just not as relevant as we once were.”
The restaurant is cutting its dividends by approximately 80% as it intends to invest heavily into overhauling its restaurants and updating its brand, according to The Wall Street Journal. The quarterly dividend will be trimmed from February’s $1.30 per share to 25 cents in August, the newspaper reported.
Masino, a former Taco Bell executive who became the CEO at Cracker Barrel in August, said the company “has lost some of its shine,” CBS News reported.
Cracker Barrel’s revenue for its latest quarter remained unchanged at $935.4 million. Its stock has plummeted 40% so far in 2024, according to the news outlet.
The stock dropped 11% in after-hours trading last week after Masino’s announcement, The Wall Street Journal reported. Company shares over the past year declined approximately 47%.
According to NASDAQ, the company’s stock was hovering at about $60 per share but fell to $48 the day after the call, USA Today reported.
The stock closed Thursday at $45.75 per share, according to the newspaper.
According to the call to investors on May 16, Cracker Barrel defined five new goals in its “strategic transformation plan:
- Refining the brand: The company engaged a leading branding agency to refine and strengthen positioning to attract new guests and have existing customers return.
- Enhancing the menu: Introducing menu innovation focused on “craveability and traffic drivers,” streamlining processes to improve execution, and optimizing strategic pricing to protect value and improve profitability. Cracker Barrel plans to remove 20 items from its menu and replace them with dishes such as “premium savory chicken and rice, slow-braised pot roast and hashbrown casserole Shepherd’s Pie,” Masino told investors. She did not say what items would be removed, USA Today reported.
- Evolving the store and guest experience: The company is in the process of testing remodel prototypes and expects to remodel 25 to 30 restaurants during fiscal 2025. “The goal, simply put, was to freshen things in such a way as to be noticeable and attractive but still feel like Cracker Barrel,” Masino said.
- Winning in digital: The company will continue to monitor guest behavior and will leverage technology such as its Cracker Barrel Rewards program.erstand consumer behavior and identify ways to drive frequency and engagement.
- Elevating employee experience: The company plans to upgrade its training and development programs and tools, and will simplify job roles.
“Cracker Barrel shared its multi-year strategic plan last week, which includes investing more in our stores to freshen up our approach over time,” the company said in a statement emailed to USA Today. “We are excited about what this means for our guest experience, including refreshed restaurants, and delivering food and an experience guests love. This also includes an update on our retail assortments to ensure our products are relevant to our guests, as well as investment in our team member experience. As we execute our plans, we believe we’ll create substantial value for all our stakeholders and will set the stage for Cracker Barrel to thrive for decades to come.”
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