Cracker Barrel's CEO said the chain is working to rebuild customer trust after its logo controversy earlier this year marked a quarter of declining sales. During its quarterly financial results call with investors on Dec. 9, Cracker Barrel CEO Julie Felss Masino acknowledged the chain has had a "difficult" past few months. "While many of our guests are enjoying our improved food and guest experience, we certainly have more work to do to regain the trust and confidence of other who have been slower to retu ...

Core Insights - Cracker Barrel has faced backlash over a logo change that removed the Uncle Hershel figure and modern farmhouse remodels perceived as off-brand, leading to criticism of management's strategies [3][6] - Biglari Capital, a significant shareholder, is advocating for the ousting of CEO Julie Masino, citing management's failure to protect the brand and alienation of loyal customers [4][6] - Despite a reported same-store sales growth of 5.4% in fiscal Q4 2025, management anticipates a decline in traffic for fiscal 2026 due to backlash from the logo change [5] Company Performance - Cracker Barrel reported a same-store sales growth of 5.4% during fiscal Q4 2025, attributed to efforts to reintroduce popular menu items and improve labor and training [5] - Management expects a decline in customer traffic following an 8% drop that began on August 19, linked to negative consumer reactions to the logo change [5] Shareholder Actions - Biglari Capital, owning approximately 3% of Cracker Barrel shares, is pushing for the removal of CEO Julie Masino and compensation committee chair Gilbert Dávila [6] - The firm has criticized recent rebranding efforts as detrimental to the company's heritage and investor confidence [6] - Sardar Biglari has a history of targeting Cracker Barrel for strategic changes over the past 14 years, with limited success [6]

Financial Data and Key Metrics Changes - For Q4 2025, total revenue was reported at $868 million, with restaurant revenue at $718.2 million and retail revenue at $149.8 million, reflecting a 4.4% increase excluding the $62.8 million benefit from the 53rd week in the prior year [11][12] - Comparable store restaurant sales grew by 5.4%, marking the fifth consecutive quarter of positive growth, while pricing for the quarter was 5.4% [11][12] - Adjusted EBITDA for Q4 was $55.7 million, or 6.4% of total revenue, with an 8% increase when excluding the impact from the 53rd week in the prior year [14][18] Business Line Data and Key Metrics Changes - Restaurant cost of goods sold was 26.3% of restaurant sales, up from 26% in the prior year, driven by menu mix and commodity inflation [12][13] - Comparable store retail sales decreased by 0.8% [12] - Off-premise sales accounted for 18.1% of restaurant sales, an increase of approximately 100 basis points year-over-year [12] Market Data and Key Metrics Changes - Traffic for the first half of August was down approximately 1%, with a decline of about 8% since the logo change on August 19 [16][17] - The company anticipates a Q1 traffic decline of approximately 7% to 8% based on current trends [17] Company Strategy and Development Direction - The company is focused on a multi-year plan to return to growth, emphasizing food quality and guest experience [7][21] - A renewed emphasis on traditional branding and nostalgia is being implemented, including reverting to the old-timer logo and traditional interiors [8][30] - The company plans to invest approximately $135 million to $150 million in capital expenditures for fiscal 2026, primarily for maintenance and technology [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about regaining traffic and momentum, citing strong guest connections and positive feedback on recent changes [9][21] - The company is navigating short-term headwinds while maintaining a conservative balance sheet and focusing on capital allocation [16][59] Other Important Information - A new $100 million share repurchase program was authorized, and a quarterly dividend of $0.25 per share was declared [16] - The company has seen strong growth in its loyalty program, with membership increasing by 3 million people over the past year [25] Q&A Session Summary Question: Marketing plan adjustments in light of traffic performance - Management expects marketing as a percentage of sales to be higher in 2026, particularly in Q1, to drive traffic recovery [37] Question: Food quality improvement plans - Food quality has always been a priority, with ongoing evaluations and adjustments based on guest feedback [39] Question: Traffic trends and regional performance - Traffic declines are broad-based, with larger declines in the Southeast, excluding Florida [46] Question: Loyalty program performance amidst traffic decline - The loyalty program has seen an increase in signups, exceeding expectations despite the traffic decline [83] Question: Competitive pricing strategies - The company maintains a strong value proposition and is confident in its pricing strategy, which includes a planned 4% to 5% menu pricing increase [68][70]