Cracker Barrel is facing significant challenges as customer visits have declined sharply following a backlash against its proposed logo change and restaurant renovations. According to the company's recent earnings call on Wednesday, traffic has decreased by 8% since the initial rollout of the new logo on August 19. If current trends persist, Cracker Barrel anticipates an ongoing decline in customer traffic of 7% to 8% throughout the remainder of the first quarter of its 2026 financial year.
The company also indicated that earnings for the current quarter, which commenced on August 1, are projected to be “significantly below” those of the previous year. This decline is attributed to both reduced customer traffic and approximately $16 million invested in advertising and marketing efforts. Following this news, Cracker Barrel's shares dropped by 3.16% on Wednesday and plummeted 9.58% in after-hours trading.
Cracker Barrel, known for its nostalgic atmosphere, recently abandoned key elements of its turnaround plan in response to backlash from conservative figures. The chain had introduced a minimalist logo that removed its iconic “old-timer” figure and barrel, leading to a significant stock decline of up to 12%. Even former President Donald Trump commented on the situation, expressing support for the return to the old logo via a post on Truth Social: “All of your fans very much appreciate it. Good luck into the future. Make lots of money and, most importantly, make your customers happy again!”
Interestingly, Cracker Barrel's latest earnings report does not account for the impacts stemming from the logo controversy. For the quarter ending August 1, same-store restaurant sales increased by 5.4%, while retail sales experienced a slight decline of 0.8%. This marks the fifth consecutive quarter of growth in same-store restaurant sales for the company.
During the earnings call, Cracker Barrel's CEO, Julie Masino, acknowledged the company's need to adjust its investment strategy in light of the backlash. “We’re moving ahead with a strong plan to regain traffic and the momentum we had a month ago. There is a lot to be optimistic about, and our teams are focused on getting back to a positive trajectory,” Masino stated.
The company had previously aimed to remodel its restaurants with a more streamlined layout, aiming to eliminate some of the clutter and antiques that have traditionally defined the Cracker Barrel experience. By the time they decided to pause this initiative, only four out of 660 locations had been remodeled.
In a recent communication on X (formerly Twitter), Cracker Barrel addressed customer concerns, stating, “You’ve shared your voices in recent weeks not just on our logo, but also on our restaurants. If your restaurant hasn’t been remodeled, you don’t need to worry, it won’t be.” The chain is seeking to attract a younger demographic as it aims to avoid the fate of other struggling restaurant chains like Red Lobster, Hooters, and TGI Fridays. Since the pandemic, the older customer base has been visiting less frequently.
Cracker Barrel's ambitious three-year, $700 million transformation plan, set to run through 2027, had shown promising signs before the logo controversy erupted. This plan includes essential maintenance and repairs to restaurants, enhancements in technology, and the goal of completing 25 to 30 remodels each year. Additionally, it encompasses menu updates and improvements to kitchen operations.
Prior to the controversy, Cracker Barrel had reported four consecutive quarters of comparable sales growth. “Our transformation plan is working,” Masino remarked in June, suggesting that customers may eventually embrace the renovations. “People’s immediate reaction to things is like, ‘Oh, this isn’t the way it was,’ but they tend to come around,” she added.
As Cracker Barrel navigates these challenges, the focus remains on regaining customer trust and revitalizing its brand. The company is hopeful that a renewed commitment to its core values and customer preferences will help turn the tide in its favor.
