Cracker Barrel’s rebrand reversal follows monetary struggles

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Cracker Barrel’s try and rebrand its company emblem spurred a viral backlash, prompting the corporate to backtrack. It occurred as the corporate’s leaders had been trying to handle the restaurant chain’s weakening monetary efficiency.

The corporate’s inventory surged within the years previous to the pandemic, reaching an all-time excessive of $185 a share in November 2018. Whereas Cracker Barrel’s inventory briefly rebounded to close these ranges within the spring of 2021, it has seen a big decline within the years because the pandemic and is buying and selling round $62 a share as of Wednesday regardless of rising over 8% on the day.

Cracker Barrel CEO Julie Felss Masino launched a metamorphosis challenge a 12 months in the past geared toward boosting gross sales and energizing its buyer base because the model confronted stagnation. The tried emblem rebrand, which the corporate reversed on Tuesday, was a part of that effort.

The transformation push has yielded combined monetary outcomes thus far. Cracker Barrel reported in its third quarter of fiscal 12 months 2025 that its comparable restaurant gross sales had been up 1% year-over-year, whereas retail gross sales had been down 3.8% over that interval.

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Cracker Barrel undertook a metamorphosis challenge final 12 months amid stagnating progress. (Al Drago/Bloomberg by way of Getty Photos / Getty Photos)

Although retail gross sales solely account for 17% of Cracker Barrel’s income, the dipping gross sales do have an effect on revenue margins.

The corporate can be dealing with headwinds from tariffs on the merchandise it sells from the retail facet of its enterprise, which have created value pressures for the corporate and have pressured it to reevaluate its provide chain.

“For context, approximately one-third of our retail products are sourced directly from vendors in China,” Cracker Barrel’s Masino mentioned on the third quarter earnings name.

“In addition to this direct exposure, we also have indirect exposure related to products that we purchased through domestic vendors that is also sourced from China,” Masino defined. “Our approach to mitigate the tariff impacts include: first, aggressively negotiating with vendors; second, alternate sourcing; and third, pricing.”

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Cracker Barrel’s CEO mentioned the corporate is working via a number of methods to mitigate tariff-induced worth pressures. (Gregory Walton/AFP by way of Getty Photos / Getty Photos)

Masino mentioned Cracker Barrel’s groups have been working to rationalize their product choices by way of the variety of SKUs and themes, in addition to their timing to raised align with buyer demand. As an illustration, she famous the corporate has traditionally put out its Halloween and Christmas themes comparatively early, although that will change.

Different methods by which the corporate is addressing tariffs embrace working with distributors and negotiating with them and their suppliers, in addition to by different means akin to via sourcing merchandise from completely different elements of the world.

“Then as the last lever and look, pricing is an option. But we’re being very thoughtful about pricing because this business is so discretionary. And we know from work that we’ve done around the transformation that value is important in this business just like it is in our restaurant business,” Masino mentioned.

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Cracker Barrel’s retail gross sales slipped within the firm’s most up-to-date quarter. (Luke Sharrett/Bloomberg by way of Getty Photos / Getty Photos)

Cracker Barrel famous that it carried ahead worth hikes of 1.5% from fiscal 12 months 2024, whereas it’s elevating costs 3.4% in fiscal 2025, which can finally depart costs about 5% increased than earlier than the will increase.

Cracker Barrel mentioned that it expects a $5 million hit to earnings resulting from tariffs within the fourth quarter. 

Masino was requested by an analyst if that determine represents a run price the corporate expects to see within the 2026 fiscal 12 months.

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“We’ll have more to share about how to think about ’26 in tariffs in September because we’ll present our annual guidance,” Masino mentioned, including that the steering will go deeper in outlining that mitigation technique.