#USA #San Antonio #Cracker Barrel #Egan-Jones #Biglari Capital

Urgent Call for Change at Cracker Barrel

In a surprising turn of events, independent proxy advisory firm Egan-Jones Ratings has made a bold recommendation for stockholders of Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL) to vote against the re-election of five incumbent directors, including CEO Julie Masino. This advisory comes in light of the company's alarming financial performance and operational setbacks, which Egan-Jones describes as indicative of a classic 'death spiral.'

Financial Underperformance Unveiled

Egan-Jones highlighted several critical issues facing Cracker Barrel, pointing to a staggering 70% decline in total shareholder return (TSR) since early 2020. This underperformance is particularly stark when compared to competitors such as Darden and Texas Roadhouse. While revenue figures may seem modestly positive, net income has plummeted nearly 80% in fiscal year 2025, raising questions about the company's long-term viability and strategic direction.

The 'Death Spiral' Warning

The proxy advisory firm emphasized that Cracker Barrel is trapped in a detrimental cycle defined by rising operating costs and declining guest traffic. Egan-Jones warns that with high fixed costs, even minor downturns in traffic can have severe repercussions on profit margins. The situation is exacerbated by the need for costly upkeep and renovations of aging facilities, which creates a vicious cycle of declining traffic and increasing expenses.

In light of these challenges, the advisory firm insisted that immediate leadership changes are of utmost importance to stabilize operations and steer the company back on course.

A Request for Immediate Action

Biglari Capital, a significant investor in Cracker Barrel, has issued a rallying call for shareholders to cast their votes using the GOLD proxy card against the election of CEO Julie Masino and other longstanding directors, including Carl Berquist, Gilbert Dávila, Gisel Ruiz, and Darryl Wade. The capital firm argues that these individuals have overseen a massive loss of shareholder value—approximately $1 billion—during their tenure.

Stockholders are urged to participate actively in the upcoming annual meeting set for November 20, 2025, emphasizing that their vote can influence much-needed change in the boardroom and beyond. Alyssa Phillips, a spokesperson for Biglari Capital, stressed, "Your vote is crucial for signaling the demand for new leadership and direction."

Looking Forward

The recommendation from Egan-Jones serves as a significant warning sign. It indicates a growing concern among shareholders about the effectiveness of the current management and their ability to navigate a shifting landscape marked by increased operational costs and changing consumer preferences.

This recommendation has sparked considerable debate among investors who are now weighing the potential implications of a leadership change against the risks of continued poor performance under the current directors.

As the November meeting approaches, the influence of institutional investors like Biglari Capital may play a critical role in determining whether Cracker Barrel takes bold steps to rejuvenate its leadership or continues its current trajectory of decline.

In conclusion, the pressing need for a strategic overhaul at Cracker Barrel has never been clearer. The urging from Egan-Jones for shareholders to reject the re-election of certain directors highlights the critical juncture the company finds itself at—one that could define its financial future for years to come.