Dive Brief:
- Cracker Barrel posted a comparable restaurant sales decline of 4.7% during its fiscal Q1 2026, which included a 7% decline in traffic, Cracker Barrel SVP and CFO Craig Pommells said Tuesday during an earnings call.
- The company continues to be impacted by its rebranding controversy, which involved removing its iconic Uncle Herschel mascot, and traffic dropped by 1% in August and then 9% for the remainder of the quarter, which ended Oct. 31, CEO and President Julie Felss Masino said during the call.
- Masino said the company is taking “decisive actions” to return traffic into positive territory including focusing on improving food quality and the guest experience and “evolving our operations and connecting with our guests through our menu, marketing and value proposition.”
Dive Insight:
The traffic slide is slightly better than the company’s previous expectation of an 8% drop during its first quarter. The company also scrapped its remodel plans, which also received backlash on social media over the modern farmhouse design, which critics called a departure from its heritage design. The branding controversy reignited criticism from long-time activist investor Sardar Biglari, who undertook another proxy fight to try and remove Masino from her post, but she retained her position in recent board elections.
“We have a brand reputation issue that we are working through, and that takes rebuilding trust one guest at a time, and that's going to take some time,” Masino said. “That's why we're so focused on operations, so that everybody who comes in has a great experience, and that will get that momentum all rolling in that direction.”
Masino emphasized that the company is focused on the future and is working on optimizing its back of house, including conducting staff training.
Although the initial phase of back-of-house changes led to some savings, it was more challenging for operators and impacted food consistency, Masino said. The company changed course and reinstated its prior processes. During its second phase, the chain is testing its methods to ensure that any changes introduced can be executed seamlessly and consistently across its system, Masino said.
“To ensure that our back-of-house teams are best positioned to deliver consistently outstanding food and experiences, during the month of October, we successfully retrained all of our managers, kitchen production staff and grill cooks on core, classic Cracker Barrel recipes as well as our new holiday offerings,” Masino said.
During the quarter, the company removed a layer of management and promoted Doug Hisel to SVP of store operations. Hisel has been focused on food quality, operations and accountability, resulting in improved guest metrics, Masino said.
“In recent months, our Google star rating, which is strongly correlated with traffic, has been running at its highest level since early 2020,” Masino said.
Regarding the guest experience, Cracker Barrel has been working to connect with consumers through its menu, marketing and loyalty program, the latter of which is helping the chain gather additional customer feedback. It has focused on returning fan favorite dishes to its menu, including Uncle Herschel’s breakfast and Chicken n’ Rice. It also added breakfast burgers during the quarter, Masino said. The company also plans to revive favorites like the Hamburger Steak and Eggs in a Basket to the menu next month.
“Going forward, we continue to leverage guest feedback and have quality improvement tests planned for signature items in the coming months,” Masino said. “We are working to ensure our core menu remains craveable and includes favorites that guests have missed.”
