You can find original article here Nrn. Subscribe to our free daily Nrn newsletters. Cracker Barrel is once again shifting strategies as the family-dining company tackles sales and revenue declines in the wake of the rebranding controversy. The company reported a 4.7% decrease in same-store sales and 5.7% decline in revenue for the first quarter ended Oct. 31 that CEO Julie Masino said were “below expectations.” Prior to the media attention around the logo backlash this past summer, Cracker Barrel’s turn ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $797.2 million, down 5.7% from the prior year quarter [23] - Adjusted EBITDA was $7.2 million, or 0.9% of total revenue, compared to $45.8 million, or 5.4% of total revenue in the prior year [27] - GAAP earnings per diluted share were -$1.10, and adjusted earnings per diluted share were -$0.74 [27] Business Line Data and Key Metrics Changes - Restaurant revenue decreased 4.8% to $650.6 million, with comparable store restaurant sales down 4.7% [23] - Total retail revenue decreased 9.4% to $146.6 million, with comparable store retail sales down 8.5% [23] - Off-premise sales accounted for 18.1% of restaurant sales [23] Market Data and Key Metrics Changes - Traffic declined approximately 11% in the quarter, with a consistent trend between -10% and -11% over the last couple of months [28][62] - The company noted a decline in consumer sentiment and overall industry traffic compared to the summer [52] Company Strategy and Development Direction - The company is focusing on improving food quality and guest experience, with a multi-pronged plan to connect with guests through menu, messaging, and loyalty programs [11][12] - A restructuring of the corporate support center is underway to streamline operations and reduce costs, aiming for annualized G&A savings of approximately $20 million-$25 million [30] - The company is committed to maintaining food quality while pursuing cost savings and operational efficiency [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a difficult macro and industry backdrop, with plans to regain trust and confidence from guests [5][6] - The outlook for fiscal 2026 anticipates total revenue of $3.2 billion to $3.3 billion, reflecting a slower recovery than previously expected [29] - Management emphasized the importance of delivering consistent quality and hospitality to drive traffic recovery [34][68] Other Important Information - The company has launched several promotional initiatives, including a military discount and a toy promotion for kids' meals, to drive traffic [15][17] - The Cracker Barrel Rewards Loyalty Program has grown to over 10 million members, accounting for 40% of tracked sales [18] Q&A Session Summary Question: Advertising Spend Reduction - Management explained that the reduction in advertising spend is to align with current traffic levels and reduce non-guest-facing costs, with a planned decrease of $12 million-$16 million in advertising expenses for Q2 to Q4 [37][38] Question: Holiday Season Plans - Management confirmed that they are actively working to drive traffic during the holiday season with promotions and menu items that resonate with guests [41][45] Question: Updated Traffic Guidance - Management indicated that the updated traffic guidance for the year includes expectations of a decline of 8% to 10%, with potential recovery in the back half of the year [50][51] Question: Macro Pressures Impact - Management noted that consumer sentiment has softened and overall industry traffic has decreased, but performance across income cohorts has remained relatively stable [52][53] Question: Challenges with Operations Initiative - Management acknowledged challenges with the rollout of the operations initiative, which impacted food consistency and guest experience, leading to a rollback of certain changes [54][55] Question: Menu Innovation and Future Offerings - Management expressed confidence in upcoming menu innovations and the return of popular items, emphasizing a focus on guest feedback and maintaining quality [66][75]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $797.2 million, down 5.7% from the prior year quarter [23] - Adjusted EBITDA was $7.2 million, or 0.9% of total revenue, compared to $45.8 million, or 5.4% of total revenue in the prior year [27] - GAAP earnings per diluted share were negative $1.10, and adjusted earnings per diluted share were negative $0.74 [27] Business Line Data and Key Metrics Changes - Restaurant revenue decreased 4.8% to $650.6 million, with comparable store restaurant sales down 4.7% [23] - Total retail revenue decreased 9.4% to $146.6 million, with comparable store retail sales down 8.5% [23] - Off-premise sales accounted for 18.1% of restaurant sales [23] Market Data and Key Metrics Changes - Traffic declined approximately 11% in Q2, with a consistent trend of negative 10% to negative 11% over the last couple of months [28][62] - The company noted a decline in consumer sentiment and softer labor numbers compared to previous months [52] Company Strategy and Development Direction - The company is focusing on improving food quality and guest experience, with operational changes and menu adjustments [5][8] - A restructuring of the corporate support center is underway to streamline operations and reduce costs [20] - The company is implementing cost-saving measures while ensuring food quality and guest experience are not compromised [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a difficult macro and industry backdrop affecting performance, with plans to regain trust and confidence from guests [5][21] - The outlook for fiscal 2026 anticipates total revenue of $3.2-$3.3 billion, reflecting a slower recovery than previously expected [29] - Adjusted EBITDA for the full year is projected to be approximately $70 million-$110 million, depending on traffic recovery [31] Other Important Information - The company has launched several promotional initiatives to drive traffic, including a military discount and holiday promotions [15][16] - The Cracker Barrel Rewards Loyalty Program has grown to over 10 million members, accounting for 40% of tracked sales [18] Q&A Session Summary Question: Advertising spend reduction rationale - Management explained that the reduction in advertising spend is to align with current traffic levels and reduce non-guest-facing costs, with a planned decrease of $12-$16 million in advertising expenses for Q2 to Q4 [37][38] Question: Incremental plans for the holiday season - Management emphasized a commitment to driving traffic through great in-store experiences and promotions, including a toy promotion that integrates restaurant and retail [41][45] Question: Updated traffic guidance for the year - Management confirmed that the updated traffic guidance reflects a decline of approximately 8%-10%, with the potential for recovery in the second half of the year [50][51] Question: Impact of operational initiative challenges - Management acknowledged that challenges in rolling out operational initiatives did impact same-store sales and traffic, leading to a decision to revert to prior processes [54][55] Question: Disaggregating macro pressures on sales - Management indicated that while macro pressures are evident, the brand's recovery efforts and promotional initiatives are also influencing traffic trends [62][63]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $797.2 million, down 5.7% from the prior year quarter [23] - Adjusted EBITDA was $7.2 million, or 0.9% of total revenue, compared to $45.8 million, or 5.4% of total revenue in the prior year [27] - GAAP earnings per diluted share were negative $1.10, and adjusted earnings per diluted share were negative $0.74 [27] Business Line Data and Key Metrics Changes - Restaurant revenue decreased 4.8% to $650.6 million, with comparable store restaurant sales down 4.7% [23] - Total retail revenue decreased 9.4% to $146.6 million, with comparable store retail sales down 8.5% [23] - Off-premise sales accounted for 18.1% of restaurant sales [23] Market Data and Key Metrics Changes - Traffic was down approximately 11% in Q2, with a decline of 7.3% in comparable store traffic for Q1 [28][23] - The company noted a decline in consumer sentiment and overall industry traffic compared to the summer months [46] Company Strategy and Development Direction - The company is focusing on improving food quality and guest experience through operational changes and menu adjustments [5][10] - A restructuring of the corporate support center is underway to streamline operations and reduce costs [20][31] - The company plans to leverage its loyalty program, which has over 10 million members, to drive traffic and enhance guest engagement [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro and industry backdrop, impacting traffic and sales [5][46] - The company anticipates total revenue for fiscal 2026 to be between $3.2 billion and $3.3 billion, reflecting a slower recovery than previously expected [30] - Management expressed confidence in returning to growth over time and creating long-term value for stakeholders [34] Other Important Information - The company has implemented a military discount program and various promotional offers to drive traffic [16][18] - The company is focusing on cost savings while ensuring food quality and guest experience are not compromised [20][31] Q&A Session Summary Question: About the cut in advertising spend - Management explained that the reduction in advertising spend is to align with current traffic levels and reduce non-guest-facing costs, with a planned decrease of $12-$16 million in advertising expenses for Q2 to Q4 [36][38] Question: Plans for the December holiday window - Management emphasized a commitment to regaining traffic momentum and highlighted ongoing efforts to enhance guest experiences and brand trust [39][40] Question: Updated guidance for traffic for the year - Management confirmed that the updated traffic guidance reflects a decline of 8% to 10%, with the potential for recovery in the latter half of the year [45] Question: Macro pressures on sales versus rebranding effects - Management noted that while macro pressures are impacting sales, some initiatives have provided short-term traffic boosts, but sustainability remains a concern [50][51] Question: Menu innovation and upcoming offerings - Management expressed confidence in upcoming menu innovations and the return of popular items, aiming to enhance guest experiences and drive traffic [56][60]

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