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Basch Report
Jax Daily Record Thursday, Jun. 16, 202205:00 AM EST

Maple Street expansion resumes

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Parent Cracker Barrel Old Country Store plans growth for the restaurant chain.
by: Mark Basch Contributing Writer

After pausing its expansion plans earlier this year, Cracker Barrel Old Country Store Inc. once again is opening new Maple Street Biscuit Company restaurants.

“We’re focused on growing Maple Street, which just opened its 50th location and has continued to perform above our expectations,” CEO Sandra Cochran said in Cracker Barrel’s quarterly conference call June 7.

Maple Street had 33 restaurants in seven states when Cracker Barrel bought the company, then based in Orange Park, for $36 million in October 2019. Cracker Barrel saw potential for expansion.

“We remain very excited about this brand and are seeing it deliver on our investment thesis that the fast-casual breakfast and lunch space is an attractive one,” Cochran said.

Maple Street added only one new restaurant in the first six months of Cracker Barrel’s fiscal year, with Cochran citing construction delays for slowing its growth plans.

It opened three more in the third quarter ended April 29 and plans six new restaurants in the fourth quarter, including two already opened.

The 50 restaurants are in nine Southern states.

“We’ve been focused on and have made great progress ensuring that we’ve got the right infrastructure in place to grow the brand, including honing the Maple Street real estate model, developing training and operational programs and hiring key leadership,” Cochran said.

The leadership hires include a new president for the Maple Street division, John Maguire, who previously was executive vice president and chief operating officer of Panera Bread.

“He was a key leader in growing Panera to one of the most successful brands in the fast casual restaurant space,” Cochran said.

Cracker Barrel reported third-quarter revenue rose 10.8% to $790.2 million. The company, with 664 Cracker Barrel restaurant and retail store locations, does not break out sales data for Maple Street.

Cochran said the economic environment and inflation slowed sales growth in March and April.

She cited three trends impacting sales.

“First, over-65-year-old guests have been slower to return to in-person dining than other demographics in our guest base. Second, the challenging economic environment caused some of our guests to manage frequency and check during the quarter,” she said.

“Finally, we believe that high gas prices disrupted traditional spring break travel patterns, resulting in lower travel visits.”

With those trends continuing, Cracker Barrel projects fourth-quarter revenue growth of 8%. 

ICE CEO downplays antitrust concern on Black Knight deal

In the month since Intercontinental Exchange Inc. agreed to buy Jacksonville-based Black Knight Inc., Wall Street has focused on antitrust concerns that could derail the deal.

However, ICE Chief Executive Jeffrey Sprecher said at an investor conference that the two companies examined potential mortgage technology antitrust issues before agreeing to the deal May 4.

Black Knight provides processing services for nearly two-thirds of all U.S. mortgage loans. ICE, best known for operating the New York Stock Exchange, has a mortgage technology business that controls about 45% of the mortgage loan origination software market.

“We worry about that (antitrust issues),” Sprecher said at a June 1 conference sponsored by Bernstein Research, according to a transcript posted by the company.

“And I’m sure the regulators and people are going to look at this,” he said.

Both companies hired third parties to explore antitrust concerns before reaching agreement on the buyout, Sprecher said.

“Both parties came back and then told us that they thought this was imminently doable, that there was very little if any overlap, that it was perfectly lawful and it was good for the consumer and good for the industry. And so, it gave us a lot of confidence,” he said.

Sprecher said Black Knight was an attractive acquisition target because its stock was undervalued.

“The best time to buy a business is when others don’t see the vision and so part of it was just an opportunistic moment in time,” he said.

“For some reason, the market really pushed down their share price in the beginning of this year, even though we had conviction that they were going to be doing well in this environment.”

New RYAM CEO predicts better results

Just nine days after a management shake-up, new Rayonier Advanced Materials Inc. CEO De Lyle Bloomquist said the cellulose specialty products company expects improved results this year.

The Jacksonville-based company said in a June 9 news release it expects adjusted earnings before interest, taxes, depreciation and amortization of about $160 million this year, up from $128 million last year.

Berenberg Capital Markets analyst Paretosh Misra had projected EBITDA of $130 million, basically unchanged from 2021, in a recent report.

Bloomquist succeeded Vito Consiglio as CEO, who left May 31 under a mutual agreement with the board of directors after just five months on the job.

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