Cracker Barrel shares tumble over 10% after brand fiasco forces chain to slash forecast
Cracker Barrel posted lower-than-expected sales in its fiscal first quarter and trimmed its income forecast for the yr because it continued to really feel the fallout from a botched plan to revamp its logo and eating places.
The Lebanon, Tennessee-based restaurant chain said Tuesday its income fell 5.7% to $797.2 million in the three months ending Oct. 31. That was decrease than the $800 million Wall Street anticipated, according to analysts polled by FactSet.
The company swung to a web loss of about $25 million, in comparison with year-earlier revenue of $4.8 million.
Quarterly income fell 5.7% to $797.2 million in the three months ending Oct. 31, below analysts’ estimates. BACKGRID
Cracker Barrel shares fell more than 10% in after-hours trading Tuesday.
Cracker Barrel said its same-store restaurant sales dropped 4.7% while sales in its retail outlets dropped 8.5%. Those declines had been also barely greater than analysts forecast.
Cracker Barrel said it now expects whole income of $3.2 billion to $3.3 billion in its 2026 fiscal yr. That’s down from $3.35 billion to $3.45 billion beforehand. The company also said it expects adjusted pre-tax earnings of $70 million to $110 million, down from $150 million to $190 million beforehand.
Cracker Barrel announced in August that it was simplifying the chain’s brand as half of a bigger plan to modernize the chain’s darkish, antique-filled eating places.
But the transfer had disastrous penalties. Fans didn’t like that the new brand didn’t embrace Cracker Barrel’s longtime mascot, an overall-clad man leaning on a barrel, or the phrases “Old Country Store.” They also rebelled against the retailer redesigns.
The new brand sparked outrage from clients. AP
Cracker Barrel backtracked a week later, saying it might keep the logo. In September, the company also suspended its plans to transform shops. The chain operates round 650 eating places nationwide, with many in Texas, Florida and Tennessee.
Cracker Barrel shareholders voted late last month to keep company CEO Julie Felss Masino in place despite the brand debacle.
Shareholders voted late last month to maintain company CEO Julie Felss Masino in place despite the brand debacle. REUTERS
But one of the company’s administrators, Gilbert Davila, resigned from Cracker Barrel’s board Thursday after preliminary outcomes indicated that shareholders rejected his reelection.
Davila, who joined Cracker Barrel’s board in 2020, is the president and CEO of DMI Consulting, a multicultural advertising and marketing firm. He reviewed Cracker Barrel’s promoting as half of his position on the board.
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