Cracker Barrel blamed inflation for a drop in silver-haired customers at the country-themed chain as rising prices took a bigger bite out of their budgets, the company said.
Customers 65 and older skipped by the highway staple over the summer, the company said in an earnings call with analysts on Tuesday – and “we still see them holding back visits,” chief marketing officer Jennifer Tate said on the call.
The 53 year-old chain sells kitschy items at its country store and serves up traditional southern comfort food like fried pickles, buttermilk biscuits, chicken fried steak, grits and loaded hash brown casserole.
The Lebanon, Tenn.-based company, said June and July were slower than usual as gas prices were elevated and lower income families curtailed their summer holiday driving.
“(We’re confronting) the challenge of navigating an environment of softer consumer demand and higher costs coupled with the uncertainty about when either of these dynamics will abate,” chief executive Sandra Cochran said.
In early August, Deutsche Bank analyst Brian Mullan cut his price target for Cracker Barrel to $100 over concerns that older diners had not returned to the chain after the pandemic.
Despite the loss in older diners, the company still reported growth in the most recent quarter.
Revenue for the fourth quarter ended July 29 increased by 5.9% from a year ago to $830.4 million while comparable store restaurant sales increased by 6.1% and comparable retail sales increased 3%, the company said.
Net income fell to $33 million from $36 million a year ago, as the company struggled with higher food inflation than it had expected. The company’s stock is down 1.4% to about $96 on Wednesday morning.
Cracker Barrel said it “gained traction” with millennials and guests between 44 and 55 — without offering details.
In August, the chain introduced a plant-based sausage, but also faced blowback from some customers who claimed the company was becoming too “woke.”
“Thanks Cracker Barrel now my family won’t be able to dine there because the troves of hippy stoner vegetarian lib cucks will now be invading my favorite chain restaurant,” wrote one Facebook user about the new veggie sausages.
