Cracker Barrel has downgraded its sales outlook for the current fiscal year after reporting first-quarter sales that fell short of expectations, a situation exacerbated by an unsuccessful attempt to update its logo and restaurant designs.
The Lebanon, Tennessee-based chain revealed on Tuesday that its sales for the three months ending October 31 dropped by 5.7%, totaling $797.2 million, which was below the $800 million forecast by analysts from FactSet.
The company recorded a net loss of approximately $25 million, a stark contrast to a profit of $4.8 million during the same period last year.
Reacting to the news, Cracker Barrel’s stock dropped over 10% in after-hours trading.
Sales at established restaurants fell 4.7%, while retail store sales plummeted by 8.5%, both of which also exceeded analysts’ predictions.
In light of these results, Cracker Barrel has adjusted its revenue expectations for fiscal 2026, projecting earnings between $3.2 billion and $3.3 billion. This is a drop from a previous forecast of $3.45 billion. Furthermore, the company now anticipates adjusted pre-tax income to be between $70 million and $110 million, down from earlier estimates of $150 million to $190 million.
Back in August, Cracker Barrel had announced a plan to simplify its logo as part of an initiative to refresh its traditionally dark, antique-style restaurants.
However, the public response was overwhelmingly negative. Many fans were upset that the new design omitted the brand’s iconic mascot—a man in overalls leaning against a barrel—as well as the phrase “Old Country Store.” Additionally, the redesign of the stores faced backlash.
A week later, the company reverted to the original logo, abandoning the renovation plans for its stores in September. Cracker Barrel operates around 650 restaurants across the U.S., predominantly in states like Texas, Florida, and Tennessee.
Despite the logo controversy, shareholders voted last month to retain CEO Julie Fels Masino in her position.
However, Gilbert Davila, one of the company’s board members, resigned last Thursday after preliminary voting results indicated that shareholders did not re-elect him. Davila had joined the board in 2020 and worked as president and CEO of a multicultural marketing firm, overseeing Cracker Barrel’s advertising strategies.
