Biglari Capital Responds to Cracker Barrel's Preliminary Q1 2025 Announcement

Rhea-AI Summary

Biglari Capital has responded critically to Cracker Barrel's Q1 2025 preliminary earnings. The company's adjusted EBITDA margin was 5.4%, down 70 bps from Q1 2023 and similar to Q1 2024, which was part of Cracker Barrel's historically worst year. Despite plans to open new stores and invest $160-180 million in capital expenditures, management maintained its FY 2025 guidance, projecting revenue and adjusted EBITDA to be similar to or lower than FY 2024. Biglari Capital expressed concerns about the effectiveness of Cracker Barrel's $700 million transformation plan and urged shareholders to vote for board changes.

Positive

• None.

Negative

• Adjusted EBITDA margin declined 70 bps year-over-year to 5.4%
• Guest traffic continued to decline in Q1 2025
• FY 2025 guidance projects flat or lower revenue and EBITDA despite expansion plans
• $160-180M capital expenditure yielding no projected improvement
• Q1 2025 performance similar to historically worst year (FY 2024)

News Market Reaction

+6.19%

1 alert

+6.19% News Effect

On the day this news was published, CBRL gained 6.19%, reflecting a notable positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

San Antonio, TX, Nov. 14, 2024 /PRNewswire/ -- 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%, 70 bps 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 its FY 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 with FY 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 elect Sardar Biglari and Milena Alberti-Perez to the Board.

View original content:https://www.prnewswire.com/news-releases/biglari-capital-responds-to-cracker-barrels-preliminary-q1-2025-announcement-302306195.html

SOURCE Biglari Capital Corp.

FAQ

What was Cracker Barrel's (CBRL) EBITDA margin in Q1 2025?

Cracker Barrel's adjusted EBITDA margin in Q1 2025 was 5.4%, which was 70 basis points lower than Q1 2023 and similar to Q1 2024.

How much capital expenditure is CBRL planning for FY 2025?

Cracker Barrel is planning capital expenditures of $160 million to $180 million for FY 2025.

What is CBRL's guidance for FY 2025?

Cracker Barrel expects FY 2025 revenue and adjusted EBITDA to be similar to or lower than FY 2024 levels.

How many new stores is CBRL planning to open in FY 2025?

Cracker Barrel plans to open two new Cracker Barrel stores and three to four new Maple Street Biscuit units.