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Cracker Barrel Earnings: Sales Momentum Intact but Traffic Headwinds Ahead

  • Writer: Hardik Shah
    Hardik Shah
  • Sep 17
  • 3 min read
Cracker Barrel Logo
Source: Carcker Barrel Annual Report

TLDR


  • Revenue Strength: Q4 revenue grew 4.4% adjusting for last year’s 53rd week; full-year revenue up 2.2%.

  • Margin Trends: Adjusted EBITDA rose 9% in FY25, aided by pricing and labor productivity.

  • Forward Outlook: FY26 guidance calls for revenue of $3.35–$3.45B and adjusted EBITDA of $150–$190M amid expected traffic declines.


Business Overview


Cracker Barrel Old Country Store, Inc. operates approximately 660 Cracker Barrel restaurants across 43 states, alongside the Maple Street Biscuit Company chain. The concept blends homestyle dining with retail merchandise, giving the brand a dual revenue stream: about 83% from restaurant sales and 17% from retail.


The company is rooted in nostalgia and “country hospitality,” with a growing loyalty base of over 9 million Rewards members who contribute more than one-third of tracked sales.


Cracker Barrel Earnings Q4 FY25


  • Revenue: $868M, down 2.9% YoY but up 4.4% adjusting for the 53rd week in FY24.

  • Comparable Store Sales: Restaurant comps +5.4%; retail comps -0.8%.

  • Profitability: GAAP EPS $0.30; adjusted EPS $0.74. Adjusted EBITDA was $55.7M, up 8% on a normalized basis.

  • Drivers: Pricing (+5.4%), favorable menu mix (+1%), labor productivity gains, partially offset by higher advertising spend and tariffs.


Full Year 2025


  • Revenue: $3.48B, up 2.2% adjusting for the 53rd week.

  • Profitability: GAAP EPS $2.06; adjusted EPS $3.16. GAAP net income rose 31% YoY (adjusted down slightly 2.9%).

  • Adjusted EBITDA: $224M, up 9% YoY on a normalized basis.


Forward Guidance


Management issued a cautious outlook for FY26:

  • Revenue: $3.35–$3.45B, assuming traffic declines of 4–7%.

  • Adjusted EBITDA: $150–$190M.

  • Inflation: 2.5–3.5% for commodities; 3–4% for hourly wages.

  • CapEx: $135–$150M, primarily for maintenance; no remodel spending.

  • Unit Development: 2 new Cracker Barrel restaurants; closure of 14 Maple Street units.

CFO Craig Pommells noted, “Traffic will be the biggest driver of EBITDA, with a flow-through impact of 30–45%”.

Operational Performance


  • Labor Costs: Improved by 100 bps YoY thanks to productivity and turnover gains.

  • Off-Premise: Grew to 18.1% of restaurant sales, up ~100 bps YoY.

  • Cost Initiatives: Management reiterated its multi-year $50–$60M cost-savings goal, with back-of-house optimization as a key lever.


Market Insights


Competition in family dining intensified in recent months, with peers launching aggressive low-price promotions. CEO Julie Masino contrasted this with Cracker Barrel’s value proposition, highlighting its average check of $15, well below casual dining at $27.


Consumer Behavior & Sentiment


  • Guest pushback on branding changes (notably the logo refresh) caused a sharp traffic drop in August. Management quickly pivoted back to the “Old Timer” logo and paused modern remodels.

  • Loyalty program adoption is accelerating, with 400K+ new members added in Q1-to-date.

  • Guests continue to value abundance and nostalgia—favoring menu items like Uncle Herschel’s breakfast and seasonal campfire meals.


Strategic Initiatives


  • Menu Evolution: Reintroduced classics (Uncle Herschel’s breakfast, chicken & rice), launched new items (pot roast, improved NY strip steak), and optimized kitchen processes.

  • Back-of-House Optimization: Phase two piloted in 15 stores, aiming for better food quality and efficiency.

  • Service Standards: Rolled out “The Herschel Way” to reinforce hospitality.

  • Marketing: Leveraged NASCAR sponsorships and targeted seasonal campaigns.

CEO Julie Masino emphasized: “We have all the right pieces to return to being a leading restaurant company with meaningfully improved margins and growth potential”.

Capital Allocation


  • CapEx: $159M in FY25, mostly for maintenance and tech.

  • Debt: Issued $345M convertible notes due 2030, used to refinance existing debt and reduce dilution risk.

  • Liquidity: $556M available at year-end; leverage ratio 2.0x.

  • Shareholder Returns: Quarterly dividend maintained at $0.25/share; new $100M share repurchase authorization announced.


The Bottom Line


Cracker Barrel delivered a resilient FY25, notching five straight quarters of restaurant comp growth and expanding EBITDA. However, guest backlash to brand changes has created a traffic headwind entering FY26, prompting cautious guidance.


Key things to watch:

  1. Traffic recovery pace—particularly in Q2 and beyond.

  2. Execution on menu innovation and hospitality upgrades.

  3. Capital discipline as management prioritizes maintenance CapEx and balances shareholder returns with leverage.


If Cracker Barrel successfully leans into nostalgia, menu quality, and value positioning, it may be able to offset near-term challenges and reignite guest loyalty.



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