Main Street Media – Cracker Barrel leaders recently unveiled plans to spend $700 million for rebranding and revitalizing their restaurants to elevate the company’s appeal to customers.
Cracker Barrel President and CEO Julie Masino, who was named to the position about nine months ago, detailed the Lebanon-based company’s “strategic transformation plan” on a conference call with investors last week.
“All the core elements are in place to be successful over the long term, but to ignite growth, we must revitalize the brand. Be clear – this is about refining and enhancing the brand not reinventing or overhauling it,” Masino said … read more.
“An iconic American eatery’s stock has plummeted in recent week after the company’s CEO said the restaurant is no longer ‘relevant’. Cracker Barrel, with 662 locations across the nation, has been diminishing in popularity over the past decade – with its loyal clientele failing to return after the pandemic. The business tanked even more when its chief executive Julie Felss Masino told investors, ‘We’re just not as relevant as we once were.’ – DAILY MAIL, 23 May 2024
COMPANY PRESS RELEASE:
LEBANON, Tenn., May 16, 2024 /PRNewswire/ — Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”) (Nasdaq: CBRL) today provided an update on its strategic transformation plan and announced changes to its capital allocation.
Cracker Barrel President and Chief Executive Officer Julie Masino [who previousy worked for Taco Bell] commented:
“I am excited about our strategic transformation plans to drive relevancy, deliver food and experiences guests love, and grow profitability. Cracker Barrel is an iconic brand with an exceptionally strong foundation, and I firmly believe our plans will allow us to capitalize on our strengths and deliver long-term success. Executing this strategy will require increased investment in our business, and we have reduced our dividend so that we can allocate capital to generate organic growth and drive meaningful value creation over time. Our Board, our management, and our teams are excited about our plans and are already hard at work to make them a reality.”
Strategic Transformation Plan
According to Masino, the company’s strategy is built on five pillars:
- Refining the brand: evolving the brand across all touchpoints. The Company has engaged a leading branding agency to refine and strengthen positioning to delight existing and new guests.
- 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.
- Evolving the store and guest experience: delivering an exceptional guest experience through operational excellence and improved store design and atmosphere. The Company is in the process of testing remodel prototypes and expects to complete 25-30 remodels in fiscal 2025.
- Winning in digital and off-premise: growing the off-premise business and leveraging technology such as Cracker Barrel Rewards. The Company continues to leverage guest data to better understand consumer behavior and identify ways to drive frequency and engagement.
- Elevating the employee experience: upgrading training and development programs and tools and simplifying job roles and utilizing technology to improve the employee experience.
Capital Allocation Update & Quarterly Dividend Declaration
The Company’s Board of Directors is committed to a balanced capital allocation approach focused on profitable growth. Investing in the business continues to be the top priority followed by returning cash to shareholders through a regular quarterly dividend and share repurchases.
In conjunction with its strategic transformation plan, the Board of Directors is modifying the Company’s capital allocation to increase investments in the business to drive organic growth and reducing the quarterly dividend to a more sustainable level.
Specifically, the Company announced its Board of Directors declared a quarterly dividend of $0.25 per share on the Company’s common stock. The quarterly dividend is payable on August 6, 2024 to shareholders of record as of July 19, 2024.
The Company is maintaining its current share repurchase authorization that has $138 million of remaining availability.
