Cracker Barrel posts Q4 revenue of $849.3M, forecasts fiscal 2027 growth

Cracker Barrel Old Country Store reported fourth-quarter fiscal 2026 revenue of $849.3 million and adjusted EBITDA of $62.1 million, marking an 11.4% year-over-year increase in profitability despite a decline in restaurant comparable sales. The company cited improving traffic trends and stronger guest metrics as evidence that its turnaround efforts are gaining traction.

Restaurant revenue totaled $698.5 million during the quarter, with comparable sales down 2.1%. This decline reflected a 6.1% drop in traffic that was partially offset by a 4.2% increase in average check, including 4.4% pricing. Chief Financial Officer Craig Pommells noted that management observed a continued gradual improvement in traffic after accounting for variability in recent quarterly comparisons. Off-premise sales accounted for 19% of restaurant sales, up approximately 100 basis points from the prior year due to third-party delivery growth.

The retail division generated $150.8 million in revenue, with comparable sales rising 0.7%. Pommells identified this as the company's strongest retail comparable-sales growth since the second quarter of fiscal 2023, supported by higher average unit selling prices and units per transaction. Toys and housewares were key drivers, along with an earlier rollout of Halloween merchandise.

Dave Deno, who assumed the role of President and CEO about six weeks before the call, stated that his early review reinforced the brand's differentiation and loyal customer base. "Cracker Barrel is on the right track," Deno said. "We are a highly differentiated brand with tremendous potential." He outlined priorities centered on food, guest experience, and employees, noting that dinner is the largest daypart opportunity where the company plans to upgrade chicken, hamburger, and steak offerings to improve quality rather than reduce costs.

Operational metrics showed improvement in the fourth quarter. Google star ratings rose 2% year over year, while food taste and service scores increased nearly 400 basis points. Hourly employee turnover declined 450 basis points from the prior year. The Cracker Barrel Rewards loyalty program surpassed 12.5 million members and accounted for more than 40% of tracked sales.

Cost of goods sold for restaurants declined 30 basis points to 26% of restaurant sales, aided by menu pricing which offset 3.1% commodity inflation driven by higher beef, produce, and seafood prices. Labor and related expenses rose 100 basis points to 37.5% of revenue due to sales deleverage and the reversal of a prior-year kitchen labor initiative.

The quarter included a $15 million tariff refund benefit, two offsetting $10 million legal settlements, and a $47.4 million net gain on sale of assets from a sale-leaseback transaction. The company also recorded a $27 million non-cash loss and an $8.5 million non-cash impairment charge related to the Maple Street divestiture, along with a $13 million non-cash impairment charge for low-performing stores.

Total debt ended the quarter at $337.2 million, down $147.4 million from a year earlier. Net proceeds of $77 million from a sale-leaseback transaction were used to reduce debt and partly offset the repayment of $150 million in convertible senior notes that matured in June.

For fiscal 2027, Cracker Barrel projects total revenue between $3.325 billion and $3.4 billion, with adjusted EBITDA expected in the range of $180 million to $200 million. The guidance anticipates comparable restaurant sales growth of roughly 3% to 5%, total pricing near 3%, and commodity inflation around 3%. Capital expenditures are forecast at $110 million to $125 million, with no new unit openings planned for the fiscal year.