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LEBANON, Tenn. - Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), a mainstay in Southern-themed restaurants and retail with a market capitalization of $1.35 billion, announced today its plans to offer $275 million in convertible senior notes due in 2030 to qualified institutional buyers. According to InvestingPro analysis, the company is currently trading near its Fair Value, while maintaining a 44-year track record of consecutive dividend payments. This private offering is contingent on market conditions and other factors.
The notes, which are senior and unsecured, will accrue interest payable semi-annually starting March 15, 2026, and mature on September 15, 2030, unless they are converted, repurchased, or redeemed earlier. This debt offering comes at a time when InvestingPro data shows the company’s current ratio at 0.65, indicating that short-term obligations exceed liquid assets. Noteholders will have the option to convert their notes under certain conditions and during specific periods. Cracker Barrel may choose to settle conversions with cash, shares of its common stock, or a combination of both.
Additionally, Cracker Barrel intends to grant initial purchasers a 13-day option to buy up to an additional $41.25 million in notes. The company will determine the interest rate, initial conversion rate, and other terms upon pricing the offering.
The proceeds from the offering are earmarked for general corporate purposes, which may include redeeming or repaying existing debt like the outstanding 0.625% convertible senior notes due in 2026 or amounts under the company’s revolving credit facility. A portion of the proceeds will also go towards the cost of capped call transactions, which aim to minimize dilution from the conversion of the new notes or to offset cash payments exceeding the principal amount of converted notes.
In connection with the notes’ pricing, Cracker Barrel plans to enter into capped call transactions with some of the initial purchasers or their affiliates and/or other financial institutions. These transactions could affect the market price of Cracker Barrel’s common stock and the notes.
The company noted that the offering and the potential shares of common stock issuable upon conversion of the notes will not be registered under the Securities Act or any state securities laws. Therefore, they may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.
This announcement comes as part of a press release statement and is not an offer to sell or a solicitation of an offer to buy any securities. The impact of the offering and related transactions on the market price of Cracker Barrel’s common stock or the notes is currently indeterminable, but could be adverse. InvestingPro subscribers can access detailed financial health metrics, 8 additional ProTips, and comprehensive analysis through the Pro Research Report, which provides deep insights into the company’s financial position and market performance.
In other recent news, Cracker Barrel Old Country Store reported its fiscal third-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $0.58, which significantly exceeded analyst forecasts of $0.26. The company’s total revenue reached $821.1 million, slightly below the anticipated $827.63 million. Despite this revenue shortfall, Cracker Barrel raised its full-year adjusted EBITDA guidance to between $215 million and $225 million. Analysts from Truist Securities, Loop Capital, and Citi have adjusted their price targets for Cracker Barrel stock, reflecting varying levels of optimism about the company’s financial trajectory. Truist Securities increased their target to $64, maintaining a Buy rating, while Loop Capital raised theirs to $55 with a Hold rating, and Citi set a target of $45, maintaining a Sell rating. Cracker Barrel’s recent performance highlights a 1.0% increase in comparable restaurant sales, although traffic declined by 3.9% amidst a 4.9% menu price increase. The company continues to focus on its transformation agenda, emphasizing efficiency initiatives and menu innovations to drive future growth. Additionally, Cracker Barrel is addressing tariff impacts, anticipating a $5 million effect in the fourth quarter, and is implementing strategies to mitigate these challenges.
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