Biglari Capital Corp. today issued the following response to Cracker Barrel Old Country Store, Inc.’s (NASDAQ: CBRL) first quarter 2025 earnings announcement.
Cracker Barrel’s preliminary Q1 2025 earnings announcement reinforces our concerns that the Company is on the wrong track.
The Company did not disclose the change in guest traffic, which continued to decline during the quarter.
The adjusted EBITDA margin in Q1 2025 was 5.4%, 70bps lower than in Q1 2023, and similar to that in Q1 2024. Considering FY 2024 was the worst year in Cracker Barrel’s history, the fact that Q1 2025 results are comparable to Q1 2024 performance suggests that the transformation plan is not working.
Importantly, Cracker Barrel did not change itsFY 2025 guidance. Management expects revenue and adjusted EBITDA in FY 2025 to be similar to or lower than in FY 2024 (assuming the midpoint of guidance), despite opening two new Cracker Barrel stores and three to four new Maple Street Biscuit units and making $160 million to $180 million in capital expenditures. If its transformation plan was succeeding, why didn’t management raise its guidance?
The Board attempted to spin the bad news, saying, “Our fiscal year is off to a strong start…,” yet management still did not change its guidance. There is a lack of confidence on the part of analysts and the investing community regarding the $700 million transformation plan.
The Q1 2025 results do not change the underlying concerns we have or the urgent need for change. Shareholders cannot afford to wait for the Company to implode.
Cracker Barrel is in trouble if the incumbent Board is investing $180 million only to stay at par withFY 2024, which saw the worst performance in company history.
Shareholders must act now to protect their investments. Vote “FOR” on the Gold proxy card to electSardar Biglari and Milena Alberti-Perez to the Board.
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SOURCE Biglari Capital Corp.
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