CBRL - Cracker Barrel: Fixable But The Visibility Of The Turnaround Plan Is Still Limited

2024-04-04 09:19:06 ET

Summary

• Cracker Barrel Old Country Store is undergoing a full revamp of its strategy to improve its operating performance.
• The company has historically been a high-dividend paying stock but experienced a significant decline in performance due to the COVID-19 pandemic.
• Limited visibility on the recent turnaround plan and lack of short-term catalysts may prevent a re-rate from occurring.

In this article, I will explore Cracker Barrel Old Country Store ( CBRL ) efforts to improve operating performance and assess valuation from different lenses. The company has largely underperformed over the last 2.5 years, and is currently facing short-term headwinds while simultaneously trying to stabilize its operating performance and implement a full revamp of its strategy (including brand repositioning) under a new CEO. In turn, this has hampered the assessment of potential margin recovery over the long-term. In my view, a lack of short-term catalysts and limited visibility on the outcome of the recent turnaround plan may continue to prevent a re-rate from materializing. ...

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