Cracker Barrel stock drops after-hours as chain reports losses from 'unique and ongoing headwinds'

Cracker Barrel released its Q1 results on Tuesday, reporting losses that sent its share price tumbling more than 10% in after-hours trading.

The beleaguered Southern restaurant chain reported a 5.7% drop in revenue compared to the prior year's first quarter, and a 4.7% decrease in comparable restaurant sales. It also reported a net income loss of $24.6 million.

"First quarter results were below our expectations amid unique and ongoing headwinds," Cracker Barrel president and chief executive Julie Masino said in a statement released ahead of the earnings call. "We have adjusted our operational initiatives, menu, and marketing to ensure we are consistently delivering delicious food and exceptional experiences. Additionally, we are executing a variety of cost savings initiatives to bolster our financial performance. Although our recovery will take time, our teams are more committed than ever, and we are confident that we will regain momentum."

Among the headwinds are shifting consumer behaviors that have hit traditional sit-down chains especially hard, as budget-conscious diners trade down to cheaper, faster options and cut back on discretionary travel and dining out — both core drivers of Cracker Barrel's roadside business.

The company has also struggled to modernize its brand without alienating its base, a tension underscored by its botched logo redesign earlier this year that sparked an online backlash and became an unexpected PR nightmare.

Cracker Barrel's stock has fallen more than 50% so far this year.

This is a developing story. Please check back for updates.

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