Cracker Barrel is making some changes to three of its popular dinner items while also using funds from a recent real estate deal involving 26 of its restaurants to cut down on debt and support future expansion.
The Tennessee-based chain announced on Wednesday that it’s focusing on enhancing the quality of its chicken, hamburger, and steak dinners, which they see as the “biggest opportunity” to boost guest satisfaction.
“We are investing in food quality,” said President and CEO Dave Deno during a call discussing the company’s fourth-quarter earnings. “Dinner presents our biggest opportunity, and we intend to upgrade our chicken, hamburger, and steak selections.”
Deno emphasized the company’s goal is to ensure that the food meets customers’ expectations in terms of “taste, temperature, and quality every time they visit.”
He also mentioned that his focus is on food, improving the guest experience, and taking care of employees as the chain aims to increase traffic and profitability.
“Part of my management approach is to concentrate on doing fewer things, but doing them better—targeting the opportunities that can make the most difference,” Deno explained. “For restaurants, it’s quite simple: you need to deliver excellent food, create a fantastic guest experience, and hire great employees who can execute both.”
“These are the key priorities: food, experience, and people,” he added.
In addition to these menu upgrades, Cracker Barrel has finalized a sale-leaseback of 26 restaurants, which brought in around $77 million in net proceeds.
“This sale-leaseback transaction resulted in $77 million, which we used to pay down some of our debt, and it helped mitigate the $150 million debt related to the maturing 0.625% convertible senior notes that we repaid in June,” stated Chief Financial Officer Craig Pommells. “We ended the quarter with total debt of $337.2 million, a reduction of $147.4 million compared to the previous year.”
Deno acknowledged ongoing challenges, particularly with lower-income customers, but mentioned that customer trends have shown signs of improvement.
“We certainly see some pressure with our low-income patrons, but as I said, our trends have been getting better,” he noted.
Pommells added that the chain’s affordability continues to be a strong point, highlighting that the average guest check sits around $16.
“If you’re feeling the pinch in terms of discretionary income, there are still plenty of ways to enjoy a great experience at Cracker Barrel,” he said.
The company also indicated that rising freight costs, including fuel surcharges, have already been accounted for in its outlook for fiscal 2027.
“We’re experiencing rising fuel surcharges related to freight, primarily from retail but to a lesser extent in the restaurant sector. All of that has been included in our projections based on the best information we have right now,” Pommells explained.
Deno took on the role of CEO in August after Julie Masino stepped down; Masino’s time included a rebranding that was met with criticism from some long-time customers.
This overhaul formed part of about a $700 million investment into Cracker Barrel’s restaurants, which included changes to store interiors, menu adjustments, and the temporary removal of the brand’s beloved “Old Timer” logo, which was later reinstated.
