Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) announced today that a cost reduction and organization streamlining initiative has resulted in the elimination of approximately 60 management and staff positions. Most of the employees affected by the layoff worked in the Company’s home office in Lebanon, Tennessee.
“The difficult decisions announced today were made as part of the annual business planning process for our 2012 fiscal year,” said Michael A. Woodhouse, the Chairman of the Board and Chief Executive Officer of Cracker Barrel Old Country Store, Inc. “Our customers continue to face a challenging economic environment, and our Company will continue to face commodity cost increases next year. We believe that the actions announced today will generate annual pretax savings of approximately $10 million, improve our organizational effectiveness, and help position our Company for continued success.”
Woodhouse added, “As we managed through the economic downturn, we have improved the efficiency of many corporate administrative functions, while continuing to make delivering an outstanding guest experience our top priority. The changes announced today do not affect any store positions. With our continued new-store growth, we have added over 1,200 store positions this year, and expect to continue adding new stores and new jobs in future years.” In recognizing the personal impact of this initiative on those affected, Woodhouse said, “We thank them for their commitment and contribution, in some cases over many years, as the Company moves to a smaller and more efficient corporate staff.”
All affected employees will receive severance pay and outplacement assistance in accordance with the Company’s policies. The Company estimates that severance and other charges related to its cost reduction initiative will reduce income from operations in the fourth quarter of the 2011 fiscal year by between $4 and $5 million, and reduce net earnings per diluted share by between $0.14 and $0.17. These charges were not included in the Company’s previously issued guidance for the fourth quarter.