Biglari Capital Writes To Cracker Barrel Shareholders On "transformation Plan"

Cracker Barrel Old Country Store

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(RTTNews) - Biglari Capital Corp., an owner of 9.3 percent stake in Cracker Barrel Old Country Store, Inc. (CBRL), a chain of restaurants ad gift stores, today issued a letter to the shareholders of Cracker Barrel discussing the company's "strategic transformation plan" issued in May this year.

"Neither the appointment of Julie Felss Masino as the Company's CEO nor her new transformation plan has restored shareholder confidence. In fact, Cracker Barrel's share price fell 14.5% when the transformation plan was revealed on May 16, 2024, and is down 50.9% since Ms. Masino became CEO-elect on August 7, 2023," the letter said.

Biglari said Since 2019, the shareholders of Cracker Barrel have lost more than $2.9 billion in market value. It believes that Cracker Barrel should have been cautious while opening new stores when customer traffic is declining in the existing ones. It also thinks that the acquisition of Holler & Dash and Punch Bowl brands were also not the best of interests of the company.

Biglari said the "strategic transformation plan" the management discussed on May 16 is a high-capital-expenditure strategy. As per the plan, the company intends to spend $600 million to 700 million in capital expenditures, about 70% of Cracker Barrel's market capitalization.

Biglari proposes that a low-capex plan should be implemented instead, which includes divesting Maple Street Biscuit, stop new store openings, improve existing store operations, pay down debt, and pay dividends. The company also seeks positions in the Board.