Cracker Barrel’s Q2 results were met with a significant negative market reaction, as the company’s quarterly revenue came in ahead of Wall Street expectations but non-GAAP profit missed the mark. Management attributed recent performance disruptions largely to customer backlash from brand refresh efforts, including logo and interior remodels that did not resonate with the core guest base. CEO Julie Masino acknowledged the missteps, noting the company’s immediate reversal to its traditional branding and a heightened focus on food quality and guest experience, stating, “We’ve listened carefully… and already begun executing new marketing and advertising initiatives, leaning into Uncle Herschel and the nostalgia around the brand.”
Is now the time to buy CBRL? Find out in our full research report (it’s free).
Cracker Barrel (CBRL) Q2 CY2025 Highlights:
- Revenue: $868 million vs analyst estimates of $855 million (2.9% year-on-year decline, 1.5% beat)
- Adjusted EPS: $0.74 vs analyst expectations of $0.77 (3.9% miss)
- Adjusted EBITDA: $55.71 million vs analyst estimates of $53.27 million (6.4% margin, 4.6% beat)
- EBITDA guidance for the upcoming financial year 2026 is $170 million at the midpoint, below analyst estimates of $235.9 million
- Operating Margin: 0.5%, down from 2.5% in the same quarter last year
- Locations: 725 at quarter end, up from 724 in the same quarter last year
- Same-Store Sales rose 5.4% year on year (0.4% in the same quarter last year)
- Market Capitalization: $980.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cracker Barrel’s Q2 Earnings Call
- Brian Mullan (Piper Sandler) asked if marketing spend would be reduced following recent brand challenges. CEO Julie Masino responded that marketing as a percent of sales would increase, especially in Q1, to support traffic recovery efforts.
- Dennis Geiger (UBS) questioned whether traffic declines were concentrated in specific regions or demographics. CFO Craig Pommells replied that declines were broad-based but more pronounced in the Southeast, with modestly better performance among guests over 65.
- Jake Bartlett (Truist Securities) pressed on the nature and timing of cost savings, specifically regarding back-of-house initiatives. Masino clarified that the $55–$60 million target is multi-year and includes several operational levers beyond kitchen changes.
- Jeffrey Farmer (Gordon Haskett) inquired about the company’s approach to price increases amid competitive value promotions. Pommells explained that the 4%–5% menu pricing is balanced by maintaining entry-level price points and leveraging the loyalty program for added guest value.
- Jon Tower (Citi) asked about the drivers behind loyalty program growth despite traffic declines. Masino noted that no significant changes were made to store-level promotions and attributed the rise to strong consumer interest in the program and upcoming front porch feedback initiatives.
Catalysts in Upcoming Quarters
In upcoming quarters, our analysts will closely track (1) the effectiveness of Cracker Barrel’s renewed marketing strategies and nostalgic branding in driving a traffic rebound, (2) execution of food quality and menu innovation efforts, and (3) progress toward delivering targeted cost savings in the face of commodity and wage inflation. Additionally, we will monitor developments in the loyalty program and the impact of paused remodel investments on guest satisfaction and operational efficiency.
Cracker Barrel currently trades at $44.28, down from $49.55 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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