CBRL

Cracker Barrel ($CBRL) Major Shareholder Accumulates $16.5 Million in Stock Over One Month Following Price Collapse

05/08/2025 17:54

Following a sharp decline in Cracker Barrel Old Country Store ($CBRL) shares earlier in 2025, a major shareholder has made an aggressive move, purchasing approximately $16.5 million worth of stock over the past month. According to SEC filings, GMT Capital and its founder Thomas Claugus acquired a total of 407,900 shares at an average price of $40.52 between April 4 and May 7, 2025. This concentrated buying began immediately after $CBRL shares dropped below $35 in early April, following a prolonged decline throughout February and March. Cracker Barrel, known for its unique business model combining restaurants with retail stores, has faced challenges in recent years. The company operates approximately 660 locations across the United States, primarily offering family-friendly Southern-style cuisine alongside country-themed gift shops. In its fiscal Q2 2025 results announced on March 6, Cracker Barrel reported earnings of $1.38 per share, significantly exceeding analyst expectations of $1.09. Revenue increased by 1.5% year-over-year to $949.44 million. Despite this positive earnings report, the stock continued its downward trajectory throughout February and March. On March 10, investment bank Truist upgraded Cracker Barrel stock to 'buy' and raised its price target to $55, citing strong quarterly results. Truist expressed confidence in sustained improvement due to new menu items and improved service. However, Cracker Barrel's financial health remains concerning. The company's debt-to-equity ratio stands at a troubling 256.59%, while its profit margin is just 1.03%. This indicates the company is operating on thin margins with a significant debt burden. Additionally, the company faces potential pressure for management changes, as activist investor Biglari announced in August 2024 its intention to nominate five candidates to the board. The U.S. restaurant industry currently faces multiple challenges, including inflation, rising labor costs, and decreased consumer spending. The family dining segment in particular has struggled to maintain competitiveness between fast-casual and premium restaurant options. Nevertheless, GMT Capital's substantial buying represents a noteworthy signal. This Atlanta-based investment firm, founded by Thomas Claugus in 1993, is known for its value investing approach. According to footnotes in the SEC filings, these transactions are reported jointly by GMT Capital and various associated entities, with disclaimers of beneficial ownership, suggesting a complex ownership structure. Claugus's timing is particularly notable. He began buying when the stock was near its 52-week low, and since then, shares have rebounded more than 20%. As of May 7, $CBRL closed at $44.34, up approximately 24% from its early April lows. Such insider buying patterns often emerge when executives or major shareholders believe a company's current share price undervalues its actual worth. The consistent purchasing by Claugus and GMT Capital demonstrates strong confidence in Cracker Barrel's long-term value and recovery potential. However, investors should remain cautious of several risk factors. The high debt levels, intensifying competition in the restaurant industry, potential decreases in consumer spending, and management instability all present near-term challenges. As we move into the latter half of 2025, it remains to be seen whether Cracker Barrel's transformation plans will deliver results and if GMT Capital's substantial bet will prove prescient. For now, the strong insider buying signal and improved performance metrics appear positive, but structural issues and industry challenges persist.

You can receive notifications when news is published.