Cracker Barrel Slashes Its Dividend as It Shakes Up Operations, Sending Stock Plunging
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Key TakeawaysCracker Barrel Old Country Store cuts its dividend 81% as it undertakes a “strategic transformation” of the restaurant and novelty store chain.The company will reduce its quarterly dividend to 25 cents from $1.30.Cracker Barrel also warned its results for the current and next quarter will be lower than previously anticipated.
Shares of Cracker Barrel Old Country Store (CBRL) plunged over 12% in intraday trading Friday after the restaurant and novelty store chain slashed its dividend as it embarked on what it called a “strategic transformation plan,” and lowered its guidance.The company announced it would be reducing its quarterly dividend to 25 cents from $1.30 as part of its efforts to modify its capital allocation “to support increased investment in the business to drive organic growth.”'Strategic Transformation Plan' GoalsCracker Barrel said that its “strategic transformation plan" is aimed at "driving relevancy, delivering food and an experience guests love, and growing profitability." It said the strategy would include “optimizing the menu, evolving the store and guest experience, winning in digital and off-premise, and elevating the employee experience.”2025 Expected To Be 'Investment Year'Cracker Barrel warned that because of weaker-than-expected traffic, it anticipates its current and fourth-quarter results could be lower than previously thought. The company noted a review of its store portfolio in the third quarter led to some closures, along with related expenses and non-cash impairment charges. In addition, it expects fiscal 2025 to be “an investment year,” with earnings before interest, taxes, depreciation, and amortization (EBITDA) in line or slightly below that of 2024.Cracker Barrel Old Country Store shares were 12.6% lower at $50.02 as of 11:45 a.m. ET Friday. They’ve lost over one-third of their value since the start of the year.
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