U.S. restaurant chain Cracker Barrel Old Country Store (CBRL) has announced that it is cutting its quarterly dividend payment to shareholders by 80%.
The move reduces the dividend to $0.25 U.S. per share from $1.30 U.S. Previously, Cracker Barrel had paid one of the highest yielding dividends at 9.08%.
The company, which operates a chain of combined restaurants and gift stores, said the dividend payout is being cut so that it can reallocate capital towards overhauling its brand and stores.
News of the dividend reduction comes as Cracker Barrel signalled an uncertain outlook for the year ahead, saying it is struggling with “…inflation, low consumer confidence and high interest rates” that are impacting consumers.
Management said in a news release that Cracker Barrel’s fiscal 2025 will be “an investment year” with capital expenditures of about $180 million U.S. to revitalize the company’s image.
The company warned that they expect upcoming fiscal third- and fourth-quarter results to be below expectations due to weaker-than-anticipated customer traffic.
No new numbers were provided for the upcoming quarters.
The stock of Cracker Barrel Old Country Store has declined 49% over the last 12 months and is down 65% over five years. The shares currently trade at $57.27 U.S. each.