Cracker Barrel said it plans to raise its menu prices — even as it reported a revenue drop at its restaurants for the third quarter — after the Southern-themed restaurant chain’s CEO admitted last week it was “just not as relevant” as it used to be.
Cracker Barrel is the latest company that has struggled to turn a profit in an era of sticky inflation.
It hopes that raising prices by 5% through the end of this year will help turn its fortunes.
The Tennessee-based company said that its third quarter total revenue came in at $817.1 million — down 1.9% compared to the same period last year.
Cracker Barrel also reported that its comparable store restaurant sales dipped by 1.5% while comparable store retail sales were down 3.8%.
Last year, Cracker Barrel posted a 7.4% year-over-year increase of same-store sales.
“As we indicated in our recent business update call, our third quarter results came in below expectations due to softer traffic than we originally anticipated, which underscores the importance of executing our strategic transformation,” Cracker Barrel President and CEO Julie Masino told investors on the earnings call.
“Our teams are fully committed to bringing these plans to life while continuing to deliver an exceptional guest experience and managing our business every shift, every day.”
Despite the report, Cracker Barrel stock was trading 3% higher on Thursday as its $0.88 earnings per share beat analyst estimates.
Cracker Barrel also dropped its revenue guidance for the full year from $3.55 billion to $3.49 billion — a 1.7% decrease.
The company, which operates more than 700 locations nationwide, said last week that it plans to spend up to $700 million over the next three years to revamp its restaurants.
Cracker Barrel plans to update its menu and overhaul its marketing strategies. It also will paint over its interior and exterior with a different color palette.
The company also wants to make its lighting brighter at its restaurants while replacing wooden chairs with booths and banquettes.
Cracker Barrel also culled its menu of 20 items while introducing new dishes such as premium savory chicken and rice, slow-braised pot roast and hash brown casserole Shepherd’s Pie.
Since the start of the year, Cracker Barrel stock has fallen by nearly 40%. In July 2019, the stock was trading at an all-time high of nearly $180.
Since then, the stock has fallen by more than 73%.
Cracker Barrel is struggling to appeal to younger customers while maintaining its traditional base of older diners.
Last year, the chain introduced rainbow-colored rocking chairs during Pride Month, which sparked a backlash and accusation of “rainbow washing.”
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