Cracker Barrel’s stock experienced a significant decline late Wednesday, driven by investor disappointment over the company’s full-year outlook, which indicated anticipated drops in both customer traffic and sales for the upcoming fiscal year. This outlook comes on the heels of a controversial revamp of the company’s logo and store designs that led to public backlash, even attracting attention from former President Trump last month.
The company projected total revenue for fiscal year 2026, which commenced on August 2, to fall between $3.35 billion and $3.45 billion, reflecting a 4% to 7% decline in traffic from the previous year. Analysts had expected revenue to reach closer to $3.52 billion.
During the earnings call, CFO Craig Pommells highlighted a troubling trend: while traffic decreased by 1% in the early part of August, it plummeted approximately 8% following the logo change unveiled on August 19. Pommells warned that if these trends continue, the company anticipates a first-quarter traffic decline of around 7% to 8%. Consequently, Cracker Barrel also withdrew its revenue forecast for fiscal year 2027, which had previously set expectations between $3.8 billion and $3.9 billion. Following this news, shares of Cracker Barrel fell by as much as 10% during after-hours trading.
For its fourth quarter, Cracker Barrel reported adjusted earnings per share of $0.74, slightly below the expected $0.76, but the revenue of $868 million surpassed forecasts. Same-store restaurant sales showed a growth of 5.4%, exceeding the anticipated 3.5%. For the entirety of the recently concluded fiscal year, the company reported revenues of $3.48 billion, marking a modest growth of less than 1% compared to the previous year.
CEO Julie Masino expressed gratitude to customers for their feedback, which she noted was instrumental in the company’s decision to revert to its old logo. She announced that the team has quickly pivoted back to the traditional branding while initiating new marketing and advertising strategies focused on nostalgia, particularly surrounding the well-known Uncle Herschel character.
Looking ahead, Cracker Barrel plans to reduce capital expenditures to between $135 million and $150 million, with no spending allotted for store remodels. The company aims to open two new Cracker Barrel locations in the upcoming fiscal year. Masino also confirmed plans to revert four locations with modern designs back to the traditional signage and decor.
With the intention to regain lost customer traffic and restore positive momentum, Masino concluded the call on an optimistic note, asserting, “There is a lot to be optimistic about.”
As the company shifts its focus to address these challenges, Cracker Barrel’s stock has lagged behind broader market trends, having fallen roughly 6% year-to-date, in stark contrast to the S&P 500’s gain of 12%. The firm also anticipates decreased adjusted EBITDA for 2026, forecasting between $150 million and $190 million, down from the $224.3 million reported for fiscal 2025. Additionally, the company is planning for commodity inflation to range from 2.5% to 3.5%, considering wage inflation between 3% to 4% and fluctuating prices for key food items.
