Cracker Barrel’s Stock Rises Amid Logo Controversy
Cracker Barrel Old Country Store Inc. saw a 7.09% increase in its stock during after-hours trading on Tuesday. This came after the restaurant chain partially backed off its controversial logo in light of political pressure and comments from the presidential front.
Trump’s Influence on Stock Movement
Former President Trump took to social media on Tuesday, urging Cracker Barrel to “return to the old logo” and describing the uproar as a “billion dollar worth of free advertising.” The official Republican account also echoed his sentiment, promising to make Cracker Barrel a “winner again.”
Regular trading on Tuesday experienced a rise of 6.35%, with after-hours trading seeing shares climb to $61.80. Benzinga remarked that for this Tennessee-based restaurant and country store, the stock fluctuated between $33.85 and $71.93 over the past year, boasting a market capitalization of $12.9 billion.
Shift in Logo Strategy
Amid customer backlash, Cracker Barrel announced it would discontinue the new logo and keep the familiar “old timer” character. In a statement on social media, the company affirmed, “We said we’d listen.”
Initially, the restaurant chain defended its brand but reversed course following conservative critiques, including remarks from Donald Trump Jr., who questioned the leadership’s direction under CEO Julie Felsmeino.
Investigations into Board Members
Conservative activist group Lobby Starback is targeting board director Gilbert Davilla, the CEO of DMI Consulting, which has focused on diversity and inclusion since 2010. Davilla joined Cracker Barrel’s board in July 2020, and concerns have been raised about the company’s strategic direction.
Looking Ahead: Profit Implications
The popular dining chain, often recognized for its southern hospitality, is set to report its fourth-quarter results in September. Analysts might scrutinize the possible effects of the recent controversy on customer traffic and any consequent boycotts. The company did note a comparable store growth of 1.0% in the third quarter, which surpasses earnings per share predictions; however, it fell short of revenue expectations despite positive growth for four consecutive quarters.
Benzinga’s Edge Stock Ranking indicates a momentum score of 79.15 for CBRL.
In summary, Cracker Barrel’s navigation through this controversy will likely have lasting implications on both its public image and financial performance.
