Current:Home > ContactCracker Barrel stock plummets after CEO says chain isn't as 'relevant,' 'must revitalize' -QuantumProfit Labs
Cracker Barrel stock plummets after CEO says chain isn't as 'relevant,' 'must revitalize'
View
Date:2025-04-18 15:42:49
Cracker Barrel's stock has taken a beating since the restaurant chain held an investor call in which its new CEO admitted the Southern country restaurant chain isn't as "relevant" as it once was.
Julie Felss Masino, who became Cracker Barrel's CEO nine months ago, told investors during the May 16 call that the 54-year-old eatery "was not delivering the financial results that shareholders deserve."
"Cracker Barrel is a great concept and a great company," Masino said. "... But to ignite growth, we must revitalize the brand."
Before Masino and Cracker Barrel's leadership held the meeting, the company's stock hovered around $60 per share, but a day after the call, it dropped almost 20%, to about $48 per share, according to NASDAQ.
The stock closed Thursday at $45.75 per share.
'Some of our recipes and processes haven't evolved in decades,' CEO Julie Felss Masino says
The reason for the call involved laying out a 10-plus-year strategic plan for Cracker Barrel that would improve margins and growth potential, according to Masino.
Since Cracker Barrel's 2019 fiscal year, the company's store traffic year to date is "down approximately 16%," Masino told investors.
"Although the casual dining industry is also significantly down during this period, the reality is we've lost some market share, especially at dinner," the CEO said.
Masino attributed the decline in the company to the COVID-19 pandemic, inflation, a lack of relevancy and a stagnant menu.
"We have a lot of menu items but some of our recipes and processes haven't evolved in decades," Masino said. "While there are examples where this makes complete sense, like handmade dumplings and biscuits for example, there are others where it does not like hand cutting lettuce and pineapple."
This fall, 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 which menu items will be removed.
Cracker Barrel to spend $700 million to combat decline in traffic
To assist in revamping Cracker Barrel, the company hired an industrial engineering firm to improve its business model, find ways to improve efficiencies, simplify its processes and reduce the amount of "fixed labor currently required in the back of house," according to Masino.
Other tactics the Tennessee-based chain is employing include conducting a full review of its menu to determine what items are profitable or not, using data science and tools to enhance pricing capabilities and remaining focused on third-party delivery and catering, Masino said.
Although a strategic plan is in place, Cracker Barrel expects its third and fourth-quarter financial results for fiscal year 2024 to be "below its previous expectations, primarily due to weaker than anticipated traffic," according to a company news release.
To combat the decline in traffic, Cracker Barrel intends to spend as much as $700 million over the next three years, including on marketing, its menu and "refreshing the interior and exterior" of its restaurants with a "different color palette," Masino said during the call.
The expectation is for the new strategic plan and spending to result in fiscal 2027 sales of approximately $3.8 billion to $3.9 billion, according to Cracker Barrel's release.
"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."
veryGood! (66972)
Related
- 'We're reborn!' Gazans express joy at returning home to north
- Are 'gym bros' cultivating a culture of orthorexia?
- Keri Russell Says Girls Were Out of the Mickey Mouse Club Once They Looked Sexually Active
- Short-handed Kona public defender’s office won’t accept new drunken driving cases
- Israel lets Palestinians go back to northern Gaza for first time in over a year as cease
- San Antonio police fatally shoot a burglary suspect following a standoff
- John Corbett regrets becoming an actor, says it's 'unfulfilling' and 'boring'
- Lena Dunham Reflects on Having Her Body Dissected During Girls Era
- Tarte Shape Tape Concealer Sells Once Every 4 Seconds: Get 50% Off Before It's Gone
- Missouri man accused of imprisoning and torturing a woman for weeks indicted for murder
Ranking
- Nearly 400 USAID contract employees laid off in wake of Trump's 'stop work' order
- It is way too hot. 160 million under alert as heat breaks records and a bridge
- Their Vermont homes were inundated by extreme flooding. A year later, they still struggle to recover
- Score 50% Off Le Creuset, 70% Off Madewell, $1 Tarte Concealer, 70% Off H&M, 65% Off Kate Spade, & More
- Federal court filings allege official committed perjury in lawsuit tied to Louisiana grain terminal
- American mountaineer William Stampfl found mummified 22 years after he vanished in Peru
- Blake Lively Shouts Out Her Hottest Plus One—and It's Not Ryan Reynolds
- Why Kim Kardashian's BFF Allison Statter Is Singing Taylor Swift's Praises
Recommendation
Highlights from Trump’s interview with Time magazine
Microsoft quits OpenAI board seat as antitrust scrutiny of artificial intelligence pacts intensifies
Short-handed Kona public defender’s office won’t accept new drunken driving cases
Fifth Third Bank illegally seized people's cars after overcharging them, feds say
The Grammy nominee you need to hear: Esperanza Spalding
Is Mercury in retrograde right now? Here's what the planetary shift means for you.
Pennsylvania is getting a new license plate that features the Liberty Bell
'It's absolutely nothing': Cowboys QB Dak Prescott dismisses concerns about ankle