Cracker Barrel Battles Consumer Pressure With $7.99 Breakfast, $8.99 Early Dine Deals

Cracker Barrel Old Country Store Inc. (NASDAQ:CBRL) stock rose Wednesday after the restaurant chain reported better-than-expected fiscal fourth-quarter results, even as it lowered its fiscal 2027 sales outlook.Cracker Barrel reported adjusted earnings of 99 cents per share, beating the Wall Street estimate of 15 cents.Quarterly sales of $849.34 million also topped the $836.89 million estimate. Revenue fell 2.2% from $868 million a year earlier.Comparable store restaurant sales fell 2.1%, driven by a 6.1% decline in traffic. Comparable store retail sales rose 0.7%, driven by higher average unit selling price and units per transaction.Profitability ImprovesGAAP net income rose to $12.2 million, or 54 cents per diluted share, from $6.8 million, or 30 cents per share, a year earlier.The company’s GAAP net income margin improved to 1.4% from 0.8%.Adjusted EBITDA increased to $62.1 million from $55.7 million. Adjusted EBITDA margin improved to 7.3% from 6.4% a year earlier.Results included a roughly $9.1 million benefit from tariff refunds, net of investments.Segment PerformanceCracker Barrel restaurant revenue was $686.2 million in the fourth quarter, down from $700 million a year earlier. The restaurant average check increased 4.2%, including pricing of 4.4%.Retail revenue rose to $150.8 million from $149.7 million. Restaurant operations accounted for 82.2% of consolidated revenue, while retail contributed 17.8%.The company said its consolidated fourth-quarter results include Maple Street Biscuit Company, or MSBC, through its July 20 divestiture. Including MSBC’s contribution, consolidated restaurant revenue was about $698.5 million.Debt Reduction And Dividend UpdateCracker Barrel ended fiscal 2026 with $36.5 million in cash and cash equivalents, compared with $39.6 million a year earlier.During the quarter, the company completed a sale-leaseback transaction and divested Maple Street Biscuit Company. It ended the fiscal year with $337.2 million in debt, down from $484.6 million a year earlier.Management highlighted improving underlying traffic trends and guest metrics. The company also continues to invest in technology and marketing to improve profitability and operating efficiency.Cracker Barrel’s board declared a quarterly dividend of 25 cents per share. The dividend is payable Nov. 12 to shareholders of record as of Oct. 16.Cracker Barrel Cuts Sales OutlookCracker Barrel lowered its fiscal 2027 sales guidance to $3.325 billion to $3.4 billion from its previous range of $3.8 billion to $3.9 billion. The new range compares with the $3.386 billion analyst estimate.The company expects comparable restaurant sales to rise 3% to 5% and adjusted EBITDA of $180 million to $200 million.Cracker Barrel forecasts commodity inflation of about 3% and hourly wage inflation of 2.5% to 3%.The company does not plan to open new stores in fiscal 2027. It expects capital expenditures of $110 million to $125 million.Earnings Call HighlightsOn the earnings call, CEO David Deno said Cracker Barrel will focus on food, guest experience and employees, with dinner a key opportunity as the chain upgrades its chicken, hamburger and steak offerings. Management said fiscal 2027 EBITDA growth should come from improving traffic, better menu mix and cost efficiencies, while pricing of about 3% is aimed largely at offsetting inflation. Cracker Barrel also highlighted its value proposition, with an average check of about $16, compared with roughly $27 for casual dining and $20 for family dining, even as lower-income customers remain under pressure. To appeal to budget-conscious diners, the chain is offering a $7.99 Sunrise Pancake Special and Early Dine meals starting at $8.99 Monday through Friday.The company plans to lean further on its 12.5 million-member loyalty program, which accounts for more than 40% of sales, to help drive traffic.CBRL Price Action: Cracker Barrel Old shares were up 3.49% at $47.06 at the time of publication on Wednesday, according to Benzinga Pro data.Image via Shutterstock Read Also: Cathie Wood-led ARK Invest Says Oil Could Crash to $30-$35 Once Strait of Hormuz Reopens As Trump Touts Positive Iran Talks