Cracker Barrel’s Weak Forecast Shows Lingering Logo Backlash

Core Viewpoint - Cracker Barrel Old Country Store Inc. has experienced a decline in sales guidance, indicating ongoing challenges from a controversial logo change, with projected revenue for fiscal 2026 falling short of analyst expectations [1][2]. Sales and Revenue Outlook - Revenue for fiscal 2026 is projected to be between $3.35 billion and $3.45 billion, while analysts had anticipated $3.52 billion [1]. - The mid-point of the sales range suggests stagnation similar to the past two years, with an expected decline in foot traffic of 4% to 7% [2]. Impact of Logo Change - The company faced significant backlash after unveiling a new logo that removed the character Uncle Herschel, leading to accusations of erasing traditional American culture [3]. - Following the negative response, Cracker Barrel reversed the logo change and halted planned restaurant remodels [3]. Foot Traffic and Customer Response - Since the logo change on August 19, foot traffic to restaurants has declined by approximately 8%, with expectations of a further decline of 7% to 8% in the fiscal first quarter [4]. - The CEO acknowledged the impact of customer feedback on the decision to halt the rebranding efforts, indicating a shift in focus towards kitchen improvements and other areas [4]. Capital Expenditures - Cracker Barrel projects capital expenditures of up to $150 million, which is below Wall Street's expectation of $183 million, primarily allocated for maintenance rather than new remodels [4]. - The company spent around $20 million on remodels last year and plans to revert those stores back to their traditional style [5].