Cracker Barrel Old Country Store Q4 Earnings Call Highlights

Key Points

• Q4 fiscal 2026 results improved: Revenue reached $849.3 million and adjusted EBITDA rose 11.4% year over year to $62.1 million. Restaurant comparable sales declined 2.1% as lower traffic offset higher pricing, while retail comparable sales increased 0.7%.
• Turnaround efforts are gaining traction: Management cited improving traffic trends, stronger food and service scores, higher guest ratings, and lower employee turnover. Priorities include upgrading dinner offerings, improving the retail shopping experience, and expanding loyalty-program personalization.
• Fiscal 2027 outlook calls for growth and deleveraging: Cracker Barrel forecast revenue of $3.325 billion to $3.4 billion and adjusted EBITDA of $180 million to $200 million, with comparable restaurant sales growth of approximately 3% to 5%. Debt fell by $147.4 million year over year, and the company plans no new unit openings while investing up to $125 million in capital expenditures.

Cracker Barrel Old Country Store NASDAQ: CBRL reported fourth-quarter fiscal 2026 revenue of $849.3 million and adjusted EBITDA of $62.1 million, as the restaurant-and-retail operator cited improving traffic trends, stronger guest metrics and continued momentum in its turnaround efforts.

Adjusted EBITDA rose 11.4% from $55.7 million a year earlier and represented 7.3% of total revenue. The company reported GAAP diluted earnings per share of $0.54 and adjusted diluted earnings per share of $0.99 for the quarter ended July 31.

President and CEO Dave Deno, who assumed the role about six weeks before the call, said his early review of the business reinforced the brand’s differentiation, loyal customer base and employee culture. He said the company’s priorities will center on food, guest experience and employees.

“Cracker Barrel is on the right track,” Deno said. “We are a highly differentiated brand with tremendous potential.”

Restaurant sales decline as traffic trend improves

Restaurant revenue totaled $698.5 million during the fourth quarter. Comparable restaurant sales declined 2.1%, reflecting a 6.1% traffic decline that was partly offset by a 4.2% increase in average check, including 4.4% pricing. Chief Financial Officer Craig Pommells said the company was comparing against a stronger quarter in the prior year and that, after accounting for variability in recent quarterly comparisons, management saw a continued gradual improvement in traffic.

Off-premise sales accounted for 19% of restaurant sales, up about 100 basis points from the prior year, driven by third-party delivery growth.

The company’s retail business generated $150.8 million in revenue. Comparable retail sales rose 0.7%, supported by higher average unit selling prices and units per transaction, partly offset by lower traffic. Pommells said the result was Cracker Barrel’s strongest retail comparable-sales growth since the second quarter of fiscal 2023. Toys and housewares were areas of strength, while the company also benefited from an earlier rollout of Halloween merchandise.

Deno described the retail shop as a competitive advantage and said the company plans to improve the shopping experience through simplified product layouts, wider aisles and improved sight lines.

Food quality and dinner offerings are central priorities

Deno said the company’s largest daypart opportunity is dinner, where it plans to upgrade chicken, hamburger and steak offerings. The investments are intended to improve food quality and guest satisfaction rather than reduce costs, and are included in fiscal 2027 guidance, he said.

Breakfast remains the company’s strongest daypart in food scores and traffic trends. Deno said Cracker Barrel will use menu work and marketing to build on that strength while working to improve dinner.

Management also highlighted progress in operational measures. In the fourth quarter, Google star ratings rose 2% year over year and remained near an all-time high. Food taste and service scores increased nearly 400 basis points, while food-temperature scores improved 500 basis points from the prior-year quarter.

The company’s loyalty program, Cracker Barrel Rewards, had more than 12.5 million members and accounted for more than 40% of tracked sales. Management said it recently launched a new website and app and is continuing to develop personalization capabilities.

Employee turnover also improved. Hourly turnover declined 450 basis points from the prior year, while manager turnover improved 85 basis points. Deno said the company will enhance training, development programs and tools for employees.

Costs, balance sheet and fiscal 2027 outlook

Restaurant cost of goods sold declined 30 basis points to 26% of restaurant sales, helped by menu pricing and partly offset by 3.1% commodity inflation. Inflation was driven primarily by higher beef, produce and seafood prices, partly offset by lower egg and poultry prices.

Labor and related expenses rose 100 basis points to 37.5% of revenue, driven by sales deleverage, the reversal of a prior-year kitchen labor initiative and higher store bonuses. Wage inflation was approximately 2%.

Fourth-quarter results included a $15 million tariff refund benefit, of which $5.9 million was reinvested in the business. They also included two offsetting $10 million legal settlements. The company recorded a $47.4 million net gain on sale of assets tied to a sale-leaseback transaction, as well as a $27 million non-cash loss and $8.5 million non-cash impairment charge related to the Maple Street divestiture. It also recorded a $13 million non-cash impairment charge related to low-performing Cracker Barrel stores, three of which closed during the quarter.

Cracker Barrel ended the quarter with $337.2 million in total debt, down $147.4 million from a year earlier. A sale-leaseback transaction produced $77 million in net proceeds, which were used to reduce debt and partly offset repayment of $150 million in convertible senior notes that matured in June. The company had $541.3 million in available capacity at quarter-end, with its revolver undrawn.

For fiscal 2027, Cracker Barrel forecast total revenue of $3.325 billion to $3.4 billion and adjusted EBITDA of $180 million to $200 million. The outlook assumes comparable restaurant sales growth of approximately 3% to 5%, total pricing of about 3%, commodity inflation of approximately 3%, and hourly wage inflation of about 2.5% to 3%.

The company expects capital expenditures of $110 million to $125 million, with about 65% allocated to maintenance and 35% directed toward technology and other strategic initiatives. It does not plan to open new units during the fiscal year.

About Cracker Barrel Old Country Store (NASDAQ:CBRL)

Cracker Barrel Old Country Store, Inc operates a chain of full-service restaurants and retail stores under the Cracker Barrel brand. Its restaurants offer Southern-inspired, homestyle meals, including breakfast served throughout the day, lunch, dinner and seasonal menu items.

The company's adjoining country stores sell a variety of merchandise, including home décor, apparel, gifts, toys, games, candy, music and food products. Cracker Barrel's locations are designed around a nostalgic country-store and roadside dining experience, with many restaurants featuring front porches and rocking chairs.

Founded in 1969 by Dan Evins, the company opened its first location in Lebanon, Tennessee.

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