It has been about a month since the last earnings report for Cracker Barrel Old Country Store (CBRL). Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cracker Barrel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Cracker Barrel Q3 Earnings & Revenues Surpass Estimates
Cracker Barrel posted third-quarter fiscal 2026 results, with earnings and revenues beating the Zacks Consensus Estimate for the second straight quarter. The top and bottom lines declined from the prior-year quarter figure.
Adjusted earnings were 29 cents per share, beating the Zacks Consensus Estimate of a loss of 45 cents. In the prior-year quarter, the company reported adjusted EPS of 58 cents.
Revenues were $797.4 million, down 2.9% year over year, but surpassed the consensus mark of $775.0 million. Comparable store restaurant sales declined 2.6% and comparable store retail sales fell 1.8% in the quarter, with comparable restaurant guest traffic down 6.7%.
CBRL’s Sales Mix Reflects Restaurant Softness
CBRL generated total revenues of $797.4 million, driven primarily by restaurant sales. Restaurant revenues were $658.4 million, down 3.1% year over year, while retail revenues were $139.0 million, down 2.0%.
The revenue mix was stable. Restaurants represented 82.6% of quarterly revenues versus 82.7% a year ago, while retail accounted for 17.4% versus 17.3%. Average store volumes eased year over year, with restaurant average store volume of $980.7 thousand and retail average store volume of $211.4 thousand for the quarter.
CBRL’s Cost Lines Show Both Help and Pressure
CBRL’s cost of goods sold (excluding depreciation and rent) was $241.0 million, down 2.6% year over year. Labor and other related expenses were $302.1 million, down 0.9%, while other store operating expenses fell 4.5% to $198.2 million. General and administrative expense moved higher, rising 7.3% to $49.4 million.
On the margin side, management pointed to mixed inflation dynamics. Total cost of goods sold was 30.2% of revenues versus 30.1% a year ago. Restaurant cost of goods sold was 26.1% of restaurant sales versus 26.2%, aided by pricing and partially offset by commodity inflation of about 2.5%. Retail cost of goods sold rose to 49.8% of retail sales from 48.9%, with higher tariffs a key driver.
Cracker Barrel’s Balance Sheet Shows Liquidity Focus
Cracker Barrel ended the quarter with cash and cash equivalents of $26.1 million versus $9.8 million a year ago, while inventories increased to $179.9 million from $168.7 million. Total assets were $2.09 billion compared with $2.14 billion at the prior-year quarter-end.
The company finished the quarter with total debt of $486.6 million, comprised of $149.9 million of short-term debt related to its 0.625% convertible senior notes due June 2026 and $336.8 million of long-term debt related to its 1.75% convertible senior notes due 2030, with no borrowings on its credit facility. Management said it intends to pay the June 2026 notes at maturity by drawing on the revolving credit facility, and noted approximately $541.3 million of available capacity at quarter end.
CBRL Raises FY26 Guidance on Execution Momentum
Following the quarter, CBRL raised its fiscal 2026 outlook. The company now expects total revenues of $3.27 billion to $3.30 billion, up from the prior $3.24 billion to $3.27 billion range. It also lifted adjusted EBITDA guidance to $120 million to $125 million from $85 million to $100 million previously.
For the cost backdrop, management reiterated expectations for commodity inflation in the low 2% range and hourly wage inflation in the low 2% range while maintaining capital expenditures guidance of $105 million to $115 million. On the call, the company also highlighted actions aimed at supporting profitability, including a corporate restructuring completed in the second quarter that is expected to deliver $20 million to $25 million in annualized G&A savings and lower advertising expense in the second half versus the prior year.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -7.69% due to these changes.
VGM Scores
Currently, Cracker Barrel has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Cracker Barrel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
