Cracker Barrel’s stock in freefall after CEO admits chain ‘just not as relevant as we once were’

Cracker Barrel’s stock has been in freefall over the past week after its CEO admitted the biscuits-and-gravy chain is “just not as relevant” as it used to be — and failed to show investors a convincing plan to revamp its restaurants.

The 54-year-old roadside eatery — with its Old Country Store and down-home menu of chicken fried steak, grits and hash brown casserole — has been steadily losing customers for the past decade.

Its senior clientele, among its most loyal, fled during the pandemic and many have since failed to return

In response, Cracker Barrel said last Thursday it plans to spend as much as $700 million over the next three years.

Top brass says the company can fix some of its problems by updating its menu and marketing and “refreshing the interior and exterior” with a “different color palette.”

“We’re just not as relevant as we once were,” chief executive Julie Felss Masino, who took the helm of the company nine months ago, said on an investor call. “Some of our recipes and processes haven’t evolved in decades.”

Management, however, also revealed that it doesn’t expect the pricey investments will begin to pay off until the second half of 2026 and 2027.

The chain slashed its yearly dividend from $1.30 per share to 25 cents a share.

The Lebanon, Tenn., based company’s shares are down by nearly 20% since the call. 

On Thursday, they traded as low as $45.35 — a 52-week low that also marked its lowest level in more than a decade. The stock closed at $45.67, down 2.1%.

Casual dining chains — including Red Lobster which filed for bankruptcy protection on Sunday, Applebee’s, IHOP and Olive Garden — have been struggling across the board to lure cash-strapped customers.

But Felss Masino said Cracker Barrel has fallen to “the middle of the pack,” adding “the reality is we’ve lost some market share, especially at dinner.”

Over the past four years, Cracker Barrel has lost 16% of its diners — a trend that has continued year to date with a 4% drop in comparable sales during the most recent quarter.

A big reason the stock is down is that there wasn’t much of a plan,” Truist analyst Jake Bartlett told The Post. “They announced a plan for a plan but they didn’t give investors enough information to judge whether reinvesting in the stores was a credible plan to address the traffic losses.”

One of its biggest challenges is attracting younger customers.

By some measures, about 10% of seniors overall have not returned to their pre-pandemic eating out habits, further increasing the urgency, according to Bartlett.

“They have a lot of senior consumers, so long term they need to migrate away from that consumer,” Bartlett said.

But courting both seniors and Gen Zers can get complicated. Last year, Cracker Barrel was accused of “going woke” for lining its front porches with rainbow-colored rocking chairs during Pride Month.

Irate customers reacted with a pledge to boycott the 660-store chain.

“Just run your business and stay out of politics!” one commenter posted after Cracker Barrel instagrammed one of the rainbow rocking chairs.

Others accused the brand of “rainbow washing” — or promoting pro-LGBTQ messaging for Pride Month purely as a marketing ploy.

When it comes to attracting a younger clientele, the CEO said she lately has seen a few signs for optimism.

“Go ahead and Google Cracker Barrel versus Anthropologie,” Felss Masino told analysts on last week’s call. “It’s a thing and if you know, you know.”

TikTok influencer @Abby.Spinach got more than 100,000 heart emojis and thousands of comments for a series of posts that compared the merchandise at Cracker Barrel’s Old Country Store to that of the upscale, trendy Anthropologie chain.

In a game she called “Cracker Barrel or Anthropologie?” the influencer challenged followers to guess which dress was from which retailer — concluding her self that Cracker Barrel’s clothing scored high marks given its relatively low prices.

“I thought it was harder to tell the difference than what I would have thought,” the influencer said.

Elsewhere, the company has hired consultants and is looking to cut its labor costs in the kitchen by purchasing some prepared ingredients. 

Most of its stores are in rural areas, but some that are in more urban locations might get price increases, management said.

There are also plans to make lighting brighter and replace uncomfortable wooden chairs with booths and banquettes.

Two of its stores got a makeover, and another 10 are testing a revamped menu, the company said.

Cracker Barrel is removing 20 items from its menu and replacing them with such dishes as “premium savory chicken and rice, slow-braised pot roast and hashbrown casserole Shepherd’s Pie,” this fall.

The company did not identify the items that it’s ditching.

“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 to The Post. “We are excited about what this means for our guest experience, including refreshed restaurants, and delivering food and an experience guests love. 

“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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