Shares of Cracker Barrel Old Country Store (NASDAQ: CBRL) tumbled 9.60% in pre-market trading on Thursday, following the release of disappointing fourth-quarter results and weak fiscal 2026 guidance. The restaurant chain, known for its Southern-style cuisine and country store retail offerings, is grappling with the aftermath of a controversial rebranding effort and declining customer traffic.
Cracker Barrel reported fourth-quarter adjusted earnings of $0.74 per share, missing analyst expectations of $0.77 and marking a significant decrease from $0.98 per share in the same period last year. While quarterly revenue of $868 million slightly exceeded analyst estimates of $855.3 million, the company's outlook for fiscal 2026 raised significant concerns among investors.
The company projects revenue between $3.35 billion and $3.45 billion for the upcoming fiscal year, falling short of the $3.52 billion analysts were expecting. More alarmingly, Cracker Barrel expects comparable store traffic to decline by 4% to 7% in fiscal 2026. This projection comes in the wake of a recent rebranding controversy that saw customer traffic drop by approximately 8% since August 19, when the company initially changed its logo.
CEO Julie Masino acknowledged the misstep during the earnings call, stating, "What cannot be captured in data is how much our guests see themselves and their own story in the Cracker Barrel experience, which is what's led to such a strong response to these changes." The company has since reverted to its original logo and suspended plans to modernize its restaurant interiors. Cracker Barrel is now focusing on a new marketing campaign emphasizing "nostalgia around the brand" in an attempt to win back customers and reverse the declining traffic trend.
Despite these challenges, Cracker Barrel announced a new $100 million share repurchase program, signaling confidence in its long-term prospects. However, investors remain wary as the company navigates through this difficult period of rebranding backlash and attempts to balance customer nostalgia with the need to stay competitive in a rapidly changing restaurant landscape.