Key Points
-
Interested in Cracker Barrel Old Country Store, Inc.? Here are five stocks we like better.
-
Cracker Barrel beat expectations in Q3, with sales of about $797 million and adjusted EBITDA of $40.3 million. Management also raised full-year adjusted EBITDA guidance to $120 million-$125 million on better execution and cost controls.
-
Restaurant traffic is still down, but trends are improving. Comparable restaurant sales fell 2.6% and traffic declined 6.7%, though management said underlying traffic has improved for a third straight quarter and average checks rose 4.3%.
-
Retail outperformed restaurant comps for the first time in over four years, helped by merchandising changes, SKU rationalization and stronger product categories like toys and collectibles. Cracker Barrel Rewards also grew to nearly 12 million members, supporting loyalty-driven sales and traffic.
Cracker Barrel Old Country Store (NASDAQ:CBRL) reported fiscal third-quarter results that exceeded management’s expectations, with executives pointing to cost controls, improved guest metrics and stronger retail execution as key contributors to the quarter.
President and CEO Julie Masino said Cracker Barrel generated sales of $797 million and adjusted EBITDA of $40 million in the quarter. CFO Craig Pommells later specified total revenue of $797.4 million, including restaurant revenue of $658.4 million and retail revenue of $139 million.
→ Meta Unveils Subscriptions: A New Offering With Real Growth Potential
“Q3 results exceeded our expectations,” Masino said, adding that performance was driven by “strong cost management across the P&L, as well as improved traffic and check.”
Restaurant Sales Decline, But Traffic Trends Improve
Pommells said comparable store restaurant sales fell 2.6% in the quarter, including a 6.7% traffic decline. However, he said management was encouraged by “gradual improvements in the underlying traffic trend.”
→ Planet Labs: Coming Back Down to Earth
The average restaurant check rose 4.3%, including 4.4% pricing. Menu mix remained slightly negative but improved from the first half of the year, which Pommells attributed to recent menu changes. Off-premise sales represented 19.6% of restaurant sales, up about 50 basis points from the prior year, driven by catering and third-party delivery growth.
Masino said Cracker Barrel’s value proposition remains a central focus. She noted that the company’s third-quarter average check was $15.85, compared with what she described as more than $27 in casual dining and more than $19 in family dining.
→ The Energy Trade Is Bigger Than Oil Prices: 3 Stocks to Buy and 2 to Sell
“Value is incredibly important in today’s environment,” Masino said. “For Cracker Barrel, it’s not a response to the moment, it’s part of who we are.”
Masino highlighted menu initiatives including the return of sugar-cured and country ham dinners, a limited-time carrot cake offering, new Garden and Farmhouse Scrambles, and Smoky Southern Salmon. She also discussed the company’s summer Campfire promotion, which includes improved Campfire chicken and beef offerings and a new Campfire breakfast skillet.
Guest Metrics and Loyalty Program Show Progress
Masino said the company’s guest metrics improved for the third consecutive quarter. She said Cracker Barrel’s Google star rating increased 4% year over year to its highest quarterly score since 2018, while food taste and service scores rose 5% and food temperature scores increased 7%.
She also said managerial turnover improved by 6%, outperforming the industry, and hourly turnover trends remained positive.
Cracker Barrel Rewards grew to nearly 12 million members, with member-tracked sales remaining above 40% in the quarter. Masino said overall loyalty member visits increased year over year, and retention among the company’s most valuable loyalty guests was consistent with historical norms.
The company is also using loyalty to support summer traffic. Masino described the Fuel Your Summer Road Trip Sweepstakes, which runs from May 19 through July 26. Loyalty members who purchase an entrée can win Cracker Barrel and fuel gift cards, with 25 weekly winners receiving a $500 Cracker Barrel gift card and a $500 gas card. The promotion includes $250,000 in total prizes.
Retail Outperforms Restaurant Comps for First Time in More Than Four Years
Retail revenue totaled $139 million, with comparable store retail sales down 1.8%. Pommells said the decline was driven by lower traffic, partially offset by increases in average unit retail and units per transaction.
Masino said retail comps outperformed restaurant comps for the first time in more than four years. She credited initiatives including SKU rationalization, optimized markdowns and improved merchandising under Heather Hager, who joined the company in September 2024 and was promoted to senior vice president in February.
Masino said toys have been a strong category, helped by social media-driven demand for sensory play and fidget toys. She also pointed to Cracker Barrel’s collectible salt and pepper shakers and its American Heritage summer assortment, which includes merchandise commemorating America’s 250th birthday.
In response to an analyst question, Masino said American Heritage merchandise had sold so quickly that the company pulled Halloween merchandise forward, and that early Halloween sales were off to a strong start.
Costs, Litigation Settlement and Balance Sheet
Pommells said total cost of goods sold was 30.2% of revenue, compared with 30.1% a year earlier. Restaurant cost of goods sold improved slightly to 26.1% of restaurant sales, helped by menu pricing and partially offset by commodity inflation. Commodity inflation was about 2.5%, driven by higher beef, pork, produce and seafood costs, partially offset by lower egg and dairy prices.
Retail cost of goods sold rose to 49.8% of retail sales from 48.9%, primarily due to tariffs, partially offset by pricing. Labor and related expenses increased to 37.9% of revenue from 37.1%, primarily due to sales deleverage, while wage inflation was approximately 2%.
Other operating expenses declined to 24.9% of revenue from 25.3%, driven by lower advertising and supplies expense, partially offset by higher utilities. General and administrative expenses rose to 6.2% of revenue from 5.6%, reflecting higher incentive compensation, professional fees and employee separation costs.
The company received $47.4 million in cash proceeds from a settlement resolving interchange fee litigation. Pommells said the amount was included in GAAP results but excluded from adjusted EBITDA.
GAAP earnings per diluted share were $1.90, while adjusted earnings per diluted share were $0.29. Adjusted EBITDA was $40.3 million, or 5.1% of total revenue, compared with $48.1 million, or 5.9% of revenue, in the prior year.
Cracker Barrel ended the quarter with $541.3 million in available capacity and $486.6 million in debt, which Pommells said was entirely composed of two convertible debt notes, with the revolver undrawn. Capital expenditures in the quarter were $27.1 million.
Guidance Raised as Management Cites Better Execution
Cracker Barrel raised its full-year adjusted EBITDA guidance to a range of $120 million to $125 million. The company expects fiscal 2026 total revenue of $3.27 billion to $3.3 billion, pricing in the low 4% range, commodity inflation in the low 2% range and hourly wage inflation in the low 2% range. Capital expenditures are expected to be $105 million to $115 million, mostly related to maintenance.
Pommells cautioned that the fourth quarter faces a tougher comparison to the prior year, but said the underlying traffic trend continues to improve. He also said the company filed a claim for approximately $17 million in tariff refunds and has received about $5 million so far, all in the fourth quarter. Guidance does not include additional refunds because of uncertainty around the remaining amount.
During the question-and-answer session, Pommells said cost control played a significant role in the improved EBITDA outlook, including better check performance, add-ons, discounting, food waste, labor and supplies. Masino added that store operations are improving, with stronger guest-facing metrics and more disciplined execution.
Management also discussed technology initiatives, including an upgraded website intended to improve online ordering, rewards and targeted content. Masino said off-premise business accounts for about 20% of restaurant sales. She also said Cracker Barrel is using AI for traffic forecasting, guest relations and analysis of guest feedback.
Masino closed the call by thanking the company’s more than 70,000 team members and said Cracker Barrel remains focused on “serving delicious food and delivering an exceptional guest experience.”
About Cracker Barrel Old Country Store (NASDAQ:CBRL)
Cracker Barrel Old Country Store, Inc operates a distinctive combination of country-themed restaurants and retail stores across the United States. Since its founding in 1969, the company has focused on providing a nostalgic dining experience reminiscent of Southern hospitality, serving breakfast, lunch and dinner with an emphasis on traditional comfort foods.
The restaurant segment offers an extensive menu featuring signature items such as buttermilk pancakes, country ham, biscuits and gravy, meatloaf and pot roast.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
The article “Cracker Barrel Old Country Store Q3 Earnings Call Highlights” was originally published by MarketBeat.
View MarketBeat’s top stocks for June 2026.
