RESOLVING THE LEDGER
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Cracker Barrel CEO Julie Masino seemed to be making progress undoing damage from the firestorm that followed the restaurant’s decision last year to redesign its folksy logo. Financial performance had improved in recent quarters, and the stock had doubled this year.
So Wall Street was stumped when the company announced on Monday that she was stepping down next month to be replaced by a veteran restaurant industry executive, David Deno, former CEO of Outback Steakhouse owner Bloomin’ Brands. Cracker Barrel shares fell 6% on the news before paring some of those losses.
What may be more head-scratching than Masino’s abrupt departure may be Cracker Barrel’s selection of Deno to replace her.
Cracker Barrel hired Deno after what it called a “comprehensive succession planning and search process,” and the board appears to be prioritizing a steady hand. He has experience as a finance chief and an operations chief, which will be an asset.
At the same time, however, the 69-year-old will have to prove quickly that he knows how to attract the younger customer base that’s eluded Cracker Barrel without alienating its core diner, and that he can devise and execute a longer-term plan.
Deno had a spotty track record at his last CEO job. During his five years as chief executive of Bloomin’ Brands, from 2019 to 2024, shares slipped 15%, vastly underperforming the S&P 500 and rivals like Darden Restaurants and Texas Roadhouse. What’s more, Outback Steakhouse treaded water on the sales front, while business at Texas Roadhouse and another competitor LongHorn Steakhouse nearly doubled, according to data from Technomic quoted by Restaurant Business Magazine.
Deno’s appointment marks the second consecutive time Cracker Barrel has hired an outsider CEO raising the question of whether it’s doing enough to cultivate its internal talent pipeline. The board wants Deno to “drive further positive momentum operationally and financially, and create sustainable value for our shareholders,” independent chairman Carl Berquist said in a press release.
For all the progress Masino, 55, had logged in recent quarters, Cracker Barrel remains on shaky ground. Last week, it said that 11 weeks into the current quarter, comparable-store restaurant sales slipped approximately 2.5% year over year. And the problem of an aging clientele that Masino was hired to solve—and Deno has now inherited—remains a tough one to crack. Some 43% of guests are aged 55 or older, while only 23% are under 34, an untenable situation for Cracker Barrel longer term.
Masino had tried to attract younger diners with the rebrand that sparked a political firestorm. Online warriors accused Cracker Barrel of going woke when it removed the barrel and the man known as the “Old Timer” from its famous logo as part of the refresh Masino was hired to execute.
She was attacked mercilessly online by commentators—even President Donald Trump weighed in—and an army of bots. Within weeks, she walked back the logo change, along with others, such as using a different color palette and simplifying restaurant decor for a less nostalgic look.
In the press release announcing the CEO change, the company gave no reason for her departure. (Masino didn’t immediately respond to a request for comment, while a Cracker Barrel spokesperson declined to comment beyond the company press release. ) If Masino left of her own accord, the personal cost of the ugly, months-long crisis may have played a role. Commentators called for her firing and attacked her looks. (As part of her exit package, she will retain personal security services provided by the company.)
Masino also contended with an activist investor calling for her replacement last year. Activist campaigns are grueling and leave less time for the actual running of the business. As Fortune reported in December, women CEOs are far more likely to be the target of a campaign and less likely to survive one.
Masino is not without blame for some of the travails she endured. After the height of the logo crisis in September, Cracker Barrel introduced its “Front Porch Feedback” program to solicit insight from members of its loyalty program, which has about 12 million people. The responses made clear that Cracker Barrel die-hards wanted more nostalgia and Americana, not less—something Masino should have known before making her changes.
Still, Masino was swift in correcting her mistakes. She reintroduced touches like traditional kettle cooking for side dishes and stopped the process of freezing biscuits in batches. Masino also brought back old menu favorites like eggs in a basket, hamburger steak, and a country ham dinner. Cracker Barrel also credits Masino with introducing non-food goodies that have been a hit with customers, notably a line of merchandise commemorating America’s 250th birthday, plus items like U.S. Constitution T-shirts, flag pillows, and patriotic smock dresses.
It’s clear that Cracker Barrel still needs a transformation like the one Masino was attempting to stage, not the kind of caretaker leadership Deno seems to offer.
This story was originally featured on Fortune.com
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