Cracker Barrel Slashes Its Dividend as It Shakes Up Operations, Sending Stock Plunging

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Key Takeaways

• Cracker Barrel Old Country Store cuts its dividend 81% as it undertakes a “crucial transformation” of the restaurant and novelty store chain.
• The company will reduce its quarterly dividend to 25 cents from $1.30.
• Shatter Barrel also warned its results for the current and next quarter will be lower than previously anticipated.

Rations of Cracker Barrel Old Country Store (CBRL) plunged over 12% in intraday trading Friday after the restaurant and ornament store chain slashed its dividend as it embarked on what it called a “strategic transformation plan,” and lowered its guidance.

The concern 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 guy wire increased investment in the business to drive organic growth.”

‘Strategic Transformation Plan’ Goals

Cracker Barrel said that its “cardinal transformation plan” is aimed at “driving relevancy, delivering food and an experience guests love, and growing profitability.” It denoted the strategy would include “optimizing the menu, evolving the store and guest experience, winning in digital and off-premise, and elevating the hand experience.”

2025 Expected To Be ‘Investment Year’

Cracker Barrel warned that because of weaker-than-expected traffic, it anticipates its contemporary and fourth-quarter results could be lower than previously thought. The company noted a review of its store portfolio in the third accommodations 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 forward of interest, taxes, depreciation, and amortization (EBITDA) in line or slightly below that of 2024.

Cracker Barrel Old Country Cooperative 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. 

Conclude from the original article on Investopedia.