Same-store restaurant sales for Cracker Barrel Old Country Stores slipped by 0.5% for the first quarter ended Oct. 27 despite a 6.8% hike in menu prices, signaling a traffic decline of more than 7% for the family-dining powerhouse.
The slide came despite the launch during the quarter of Cracker Barrel’s first customer loyalty program.
Coupled with an 8.1% fall in sales within the retail shops that complement the brand’s dining rooms, the slide in customer counts dragged down net profits by 68% to $5.5 million. Revenues slipped 2%, to $823.8 million.
Management tempered the bad news for investors by emphasizing month-over-month improvements in guest counts during the quarter, a trend attributed to the Cracker Barrel brand’s marketing and emphasis on improving the experiences of its guests.
“We will continue to focus on these initiatives along with operational excellence, and we believe these efforts will resonate with guests and will support improved performance in the remainder of the fiscal year and beyond,” CEO Julie Masino said in a statement.
She said the launch of Cracker Barrel’s loyalty program “had exceeded our expectations,” and projected that “it will be a meaningful differentiator and traffic driver over the long term."
Masino stepped into the role of CEO on Nov. 1, or after the quarter had ended. She succeeded Sandy Cochran, who had held the post for 12 years.
In releasing results for the quarter, Cracker Barrel projected that it will open nine to 11 units of Maple Street Biscuit Co., its fledgling breakfast-and-lunch concept. The company did not break out results for that chain, which finished Q1 with 60 stores, or six more than it had in operation a year ago.
The Cracker Barrel had three fewer units open during the period than it did a year earlier, with 661 stores in operation as of Oct. 27. The company said it plans to open two units of that brand during the current fiscal year.
Correction: An earlier version of this story erroneously stated that Cracker Barrel closed three stores during Q1. In fact, the chain had three fewer stores in operation than it did a year earlier.
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