Core Insights - Cracker Barrel Old Country Store reported a revenue of $797.19 million for the quarter ended October 2025, reflecting a year-over-year decline of 5.7% [1] - The earnings per share (EPS) for the same period was -$0.74, compared to $0.45 a year ago, indicating a significant drop in profitability [1] - The reported revenue fell short of the Zacks Consensus Estimate of $801.06 million, resulting in a surprise of -0.48%, while the EPS exceeded expectations by 5.13% [1] Financial Performance Metrics - Comparable-store sales for the restaurant segment decreased by 4.7%, which was better than the three-analyst average estimate of -5.2% [4] - Comparable-store sales for the retail segment saw a decline of 8.5%, worse than the three-analyst average estimate of -5.2% [4] - Company-owned units totaled 656, slightly below the average estimate of 657 by three analysts [4] - The total number of stores at the end of the period was 710, compared to the average estimate of 717 based on two analysts [4] - Retail revenues were reported at $146.53 million, which is a 9.5% year-over-year decline and below the average estimate of $152.64 million [4] - Restaurant revenues amounted to $634.84 million, representing a year-over-year decline of 7.1%, also falling short of the three-analyst average estimate of $648.49 million [4] Stock Performance - Over the past month, Cracker Barrel's shares have returned -8.5%, contrasting with the Zacks S&P 500 composite's increase of +1.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Cracker Barrel reported lower-than-expected sales and reduced its revenue forecast for the fiscal year due to negative customer reactions to a logo and restaurant redesign initiative [1][4]. Financial Performance - Revenue fell 5.7% to $797.2 million for the three months ending October 31, below the anticipated $800 million [1][6]. - The company experienced a net loss of approximately $25 million, a significant decline from a profit of $4.8 million in the same period last year [2]. Sales Metrics - Same-store restaurant sales decreased by 4.7%, while retail shop sales dropped by 8.5%, both figures exceeding analysts' forecasts [3]. Revenue Forecast - The company now expects total revenue for the 2026 fiscal year to be between $3.2 billion and $3.3 billion, down from a previous estimate of $3.35 billion to $3.45 billion [4]. - Adjusted pre-tax earnings are now projected to be between $70 million and $110 million, reduced from an earlier forecast of $150 million to $190 million [4]. Customer Reaction - The new logo and store redesign faced backlash from customers, leading to a decision to revert to the original logo and suspend remodeling plans [5][8]. - The company operates around 650 restaurants across the U.S., with a significant presence in Texas, Florida, and Tennessee [8]. Leadership Changes - Despite the logo controversy, shareholders voted to retain CEO Julie Felss Masino [10]. - A board member, Gilbert Davila, resigned following preliminary results indicating shareholders rejected his reelection [9].

Core Insights - Cracker Barrel Old Country Store reported a quarterly loss of $0.74 per share, which was better than the Zacks Consensus Estimate of a loss of $0.78, representing an earnings surprise of +5.13% [1] - The company posted revenues of $797.19 million for the quarter ended October 2025, missing the Zacks Consensus Estimate by 0.48% and down from $845.09 million a year ago [2] - Cracker Barrel shares have declined approximately 49.6% year-to-date, contrasting with the S&P 500's gain of 16.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07 on revenues of $926.5 million, and for the current fiscal year, it is $1.53 on revenues of $3.43 billion [7] - The estimate revisions trend for Cracker Barrel was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Retail - Restaurants industry, to which Cracker Barrel belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $797.2 million, down 5.7% from the prior year quarter [23] - Adjusted EBITDA was $7.2 million, or 0.9% of total revenue, compared to $45.8 million, or 5.4% of total revenue in the prior year [27] - GAAP earnings per diluted share were -$1.10, and adjusted earnings per diluted share were -$0.74 [27] Business Line Data and Key Metrics Changes - Restaurant revenue decreased 4.8% to $650.6 million, with comparable store restaurant sales down 4.7% [23] - Total retail revenue decreased 9.4% to $146.6 million, with comparable store retail sales down 8.5% [23] - Off-premise sales accounted for 18.1% of restaurant sales [23] Market Data and Key Metrics Changes - Traffic declined approximately 11% in the quarter, with a consistent trend between -10% and -11% over the last couple of months [28][62] - The company noted a decline in consumer sentiment and overall industry traffic compared to the summer [52] Company Strategy and Development Direction - The company is focusing on improving food quality and guest experience, with a multi-pronged plan to connect with guests through menu, messaging, and loyalty programs [11][12] - A restructuring of the corporate support center is underway to streamline operations and reduce costs, aiming for annualized G&A savings of approximately $20 million-$25 million [30] - The company is committed to maintaining food quality while pursuing cost savings and operational efficiency [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a difficult macro and industry backdrop, with plans to regain trust and confidence from guests [5][6] - The outlook for fiscal 2026 anticipates total revenue of $3.2 billion to $3.3 billion, reflecting a slower recovery than previously expected [29] - Management emphasized the importance of delivering consistent quality and hospitality to drive traffic recovery [34][68] Other Important Information - The company has launched several promotional initiatives, including a military discount and a toy promotion for kids' meals, to drive traffic [15][17] - The Cracker Barrel Rewards Loyalty Program has grown to over 10 million members, accounting for 40% of tracked sales [18] Q&A Session Summary Question: Advertising Spend Reduction - Management explained that the reduction in advertising spend is to align with current traffic levels and reduce non-guest-facing costs, with a planned decrease of $12 million-$16 million in advertising expenses for Q2 to Q4 [37][38] Question: Holiday Season Plans - Management confirmed that they are actively working to drive traffic during the holiday season with promotions and menu items that resonate with guests [41][45] Question: Updated Traffic Guidance - Management indicated that the updated traffic guidance for the year includes expectations of a decline of 8% to 10%, with potential recovery in the back half of the year [50][51] Question: Macro Pressures Impact - Management noted that consumer sentiment has softened and overall industry traffic has decreased, but performance across income cohorts has remained relatively stable [52][53] Question: Challenges with Operations Initiative - Management acknowledged challenges with the rollout of the operations initiative, which impacted food consistency and guest experience, leading to a rollback of certain changes [54][55] Question: Menu Innovation and Future Offerings - Management expressed confidence in upcoming menu innovations and the return of popular items, emphasizing a focus on guest feedback and maintaining quality [66][75]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $797.2 million, down 5.7% from the prior year quarter [23] - Adjusted EBITDA was $7.2 million, or 0.9% of total revenue, compared to $45.8 million, or 5.4% of total revenue in the prior year [27] - GAAP earnings per diluted share were negative $1.10, and adjusted earnings per diluted share were negative $0.74 [27] Business Line Data and Key Metrics Changes - Restaurant revenue decreased 4.8% to $650.6 million, with comparable store restaurant sales down 4.7% [23] - Total retail revenue decreased 9.4% to $146.6 million, with comparable store retail sales down 8.5% [23] - Off-premise sales accounted for 18.1% of restaurant sales [23] Market Data and Key Metrics Changes - Traffic declined approximately 11% in Q2, with a consistent trend of negative 10% to negative 11% over the last couple of months [28][62] - The company noted a decline in consumer sentiment and softer labor numbers compared to previous months [52] Company Strategy and Development Direction - The company is focusing on improving food quality and guest experience, with operational changes and menu adjustments [5][8] - A restructuring of the corporate support center is underway to streamline operations and reduce costs [20] - The company is implementing cost-saving measures while ensuring food quality and guest experience are not compromised [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a difficult macro and industry backdrop affecting performance, with plans to regain trust and confidence from guests [5][21] - The outlook for fiscal 2026 anticipates total revenue of $3.2-$3.3 billion, reflecting a slower recovery than previously expected [29] - Adjusted EBITDA for the full year is projected to be approximately $70 million-$110 million, depending on traffic recovery [31] Other Important Information - The company has launched several promotional initiatives to drive traffic, including a military discount and holiday promotions [15][16] - The Cracker Barrel Rewards Loyalty Program has grown to over 10 million members, accounting for 40% of tracked sales [18] Q&A Session Summary Question: Advertising spend reduction rationale - Management explained that the reduction in advertising spend is to align with current traffic levels and reduce non-guest-facing costs, with a planned decrease of $12-$16 million in advertising expenses for Q2 to Q4 [37][38] Question: Incremental plans for the holiday season - Management emphasized a commitment to driving traffic through great in-store experiences and promotions, including a toy promotion that integrates restaurant and retail [41][45] Question: Updated traffic guidance for the year - Management confirmed that the updated traffic guidance reflects a decline of approximately 8%-10%, with the potential for recovery in the second half of the year [50][51] Question: Impact of operational initiative challenges - Management acknowledged that challenges in rolling out operational initiatives did impact same-store sales and traffic, leading to a decision to revert to prior processes [54][55] Question: Disaggregating macro pressures on sales - Management indicated that while macro pressures are evident, the brand's recovery efforts and promotional initiatives are also influencing traffic trends [62][63]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $797.2 million, down 5.7% from the prior year quarter [23] - Adjusted EBITDA was $7.2 million, or 0.9% of total revenue, compared to $45.8 million, or 5.4% of total revenue in the prior year [27] - GAAP earnings per diluted share were negative $1.10, and adjusted earnings per diluted share were negative $0.74 [27] Business Line Data and Key Metrics Changes - Restaurant revenue decreased 4.8% to $650.6 million, with comparable store restaurant sales down 4.7% [23] - Total retail revenue decreased 9.4% to $146.6 million, with comparable store retail sales down 8.5% [23] - Off-premise sales accounted for 18.1% of restaurant sales [23] Market Data and Key Metrics Changes - Traffic was down approximately 11% in Q2, with a decline of 7.3% in comparable store traffic for Q1 [28][23] - The company noted a decline in consumer sentiment and overall industry traffic compared to the summer months [46] Company Strategy and Development Direction - The company is focusing on improving food quality and guest experience through operational changes and menu adjustments [5][10] - A restructuring of the corporate support center is underway to streamline operations and reduce costs [20][31] - The company plans to leverage its loyalty program, which has over 10 million members, to drive traffic and enhance guest engagement [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro and industry backdrop, impacting traffic and sales [5][46] - The company anticipates total revenue for fiscal 2026 to be between $3.2 billion and $3.3 billion, reflecting a slower recovery than previously expected [30] - Management expressed confidence in returning to growth over time and creating long-term value for stakeholders [34] Other Important Information - The company has implemented a military discount program and various promotional offers to drive traffic [16][18] - The company is focusing on cost savings while ensuring food quality and guest experience are not compromised [20][31] Q&A Session Summary Question: About the cut in advertising spend - Management explained that the reduction in advertising spend is to align with current traffic levels and reduce non-guest-facing costs, with a planned decrease of $12-$16 million in advertising expenses for Q2 to Q4 [36][38] Question: Plans for the December holiday window - Management emphasized a commitment to regaining traffic momentum and highlighted ongoing efforts to enhance guest experiences and brand trust [39][40] Question: Updated guidance for traffic for the year - Management confirmed that the updated traffic guidance reflects a decline of 8% to 10%, with the potential for recovery in the latter half of the year [45] Question: Macro pressures on sales versus rebranding effects - Management noted that while macro pressures are impacting sales, some initiatives have provided short-term traffic boosts, but sustainability remains a concern [50][51] Question: Menu innovation and upcoming offerings - Management expressed confidence in upcoming menu innovations and the return of popular items, aiming to enhance guest experiences and drive traffic [56][60]

Cracker Barrel faced a social-media backlash. It now faces "unique and ongong headwinds†in its business. ...

Core Insights - Cracker Barrel reported lower-than-expected sales in its fiscal first quarter, with revenue declining 5.7% to $797.2 million, falling short of the $800 million forecast by analysts [1] - The company has revised its revenue forecast for the fiscal year 2026 to a range of $3.2 billion to $3.3 billion, down from the previous estimate of $3.35 billion to $3.45 billion [2] - Same-store restaurant sales decreased by 4.7%, while retail shop sales dropped by 8.5%, both figures exceeding analyst expectations [2] Company Actions and Reactions - Following the disappointing sales results, Cracker Barrel's shares fell over 10% in after-hours trading [3] - The company attempted to modernize its brand by changing its logo and restaurant designs, but the changes were met with backlash from customers, leading to a decision to revert to the original logo and suspend remodeling plans [3][4] - Despite the logo controversy, shareholders voted to retain CEO Julie Felss Masino, while board member Gilbert Davila resigned after failing to secure reelection [6][7]

Cracker Barrel released its Q1 results on Tuesday, reporting losses that sent its share price tumbling more than 10% in after-hours trading. The beleaguered Southern restaurant chain reported a 5.7% drop in revenue compared to the prior year's first quarter, and a 4.7% decrease in comparable restaurant sales. It also reported a net income loss of $24.6 million."First quarter results were below our expectations amid unique and ongoing headwinds," Cracker Barrel president and chief executive Julie Masino sai ...

Financial Performance - Total revenue for the first quarter decreased by 5.7% compared to the same period in the prior year, amounting to $797,188,000[98]. - Comparable store restaurant sales decreased by 4.7%, while comparable store retail sales decreased by 8.5%[99]. - Operating income for the quarter was a loss of 4.1% of total revenue, compared to a gain of 0.8% in the prior year[97]. - Operating loss for the first quarter of 2026 was $(32,797), a significant decline from operating income of $7,071 in the same period of 2025, attributed to decreased total revenue and higher expenses[122]. - Net loss for the first quarter of 2026 was $(24,622), compared to net income of $4,844 in the prior year, primarily due to the operating loss[127]. - Cash used in operations was $53,430 in the first quarter of 2026, a substantial increase from $4,395 in the same period of 2025, driven by operating losses and timing of payments[130]. Cost and Expenses - The cost of goods sold increased to 31.2% of total revenue, up from 30.6% in the previous year[97]. - Labor and related expenses rose to 37.8% of total revenue, compared to 36.4% in the prior year[97]. - Other store operating expenses rose to 28.7% of total revenue in the first quarter of 2026, compared to 25.0% in the prior year, primarily due to increased occupancy and advertising costs[113]. - Labor and related expenses increased to 37.8% of total revenue in the first quarter of 2026, up from 36.4% in the same period of 2025, driven by higher store management compensation and hourly labor costs[108]. Strategic Initiatives - The company plans to refine its brand identity and enhance its menu offerings as part of its multi-year strategic plan[93]. - Negative publicity from recent brand initiatives contributed to a decrease in guest traffic, impacting overall sales[102]. Capital and Financing - Capital expenditures for the first quarter of 2026 were $34,165, down from $38,887 in the prior year, with expectations of $110,000 to $125,000 for the full year[131][132]. - The Company issued the 2030 Notes with a cash interest rate of 1.75% per annum, maturing on September 15, 2030, and net proceeds of approximately $335 million after fees[136]. - Approximately $145.9 million of the net proceeds from the 2030 Notes were used to repurchase $150 million of the 2026 Notes, which bear a cash interest rate of 0.625% per annum[137]. - The Company had negative working capital of $288.3 million as of October 31, 2025, an improvement from negative working capital of $312.5 million on August 1, 2025[144]. - Outstanding borrowings under the 2025 Revolving Credit Facility totaled $65 million as of October 31, 2025, with interest rate risk managed through a mix of fixed and variable rate debt[154]. - A one-percentage point change in the $65 million outstanding borrowings would impact pre-tax annualized costs by approximately $657[155]. Dividends and Share Repurchase - During the first three months of 2026, the Company paid a regular dividend of $0.25 per share and declared another dividend of $0.25 per share for payment on February 11, 2026[140]. - The Board of Directors approved a share repurchase authorization of up to $100 million, although no shares were repurchased in the first quarter of 2026[141]. Tax and Credit Risk - The effective tax rate for the first quarter of 2026 was 32.6%, an increase from (287.8)% in the prior year, primarily due to the benefit of employment credits in the previous period[124]. - The Company believes it does not have a material exposure to credit risk related to its Capped Call Transactions and Convertible Note Hedge Transactions at this time[156]. Store Operations - The number of Cracker Barrel locations decreased from 658 to 656, while Maple Street Biscuit Company locations decreased from 69 to 54[97]. - The company operates 656 Cracker Barrel stores in 43 states and 54 Maple Street Biscuit Company locations in ten states as of October 31, 2025[88].