Cracker Barrel's Q2 FY2026 Earnings: A Gradual Turnaround

Cracker Barrel reported total sales of $874.8 million, with adjusted EBITDA of $38.2 million, or 4.4% of total revenue, in Q2 FY2026. The company's EPS came in at $0.25, beating estimates of -$0.1. Revenue was down 7.9% year-over-year, with restaurant revenue decreasing 7.5% to $694.3 million. The decline was largely driven by a 10.1% traffic decline, partially offset by a 3.4% increase in average check. The company's retail sales also declined, down 9.3% to $180.5 million.

                            📋 Highlights
                            Total Revenue & Adjusted EBITDA:
                                        Q2 revenue $874.8M (-7.9% YoY), adjusted EBITDA $38.2M (4.4% of revenue vs. 7.9% in prior year).
Guest Satisfaction Improvements:
                                        Google Star rating hit 4.28, highest since Q2 FY20, with positive trends in food taste, service, and value scores.
Menu & Value Strategy:
                                        Reintroduced favorites (e.g., Country Fried Turkey) and launched meals for 2 starting at $19.99, driving guest preference lifts.
Loyalty Program Impact:
                                        Cracker Barrel Rewards members (11M) contributed 40% of tracked sales, enhancing engagement through targeted marketing.
Full-Year Outlook:
                                        Adjusted EBITDA guidance of $85–100M, with cost savings ($20–25M annualized) and lower capex ($105–115M) to support profitability.

                        

Operational Improvements

Despite the decline in sales, Cracker Barrel is making progress on its operations, with improvements in food taste, service, and value scores. The company's Google star rating was 4.28 in Q2, the highest quarterly score since Q2 FY2020. The company is also seeing positive trends in its menu strategy, with the reintroduction of guest favorites and the launch of new items like the breakfast burger. According to the company, "we've seen a meaningful lift in guest preference since launching meals for 2 starting at $19.99."

Outlook and Guidance

Cracker Barrel expects total revenue of $3.24 billion to $3.27 billion for FY2026, with pricing of approximately 4% and lower menu mix resulting from higher discounts. The company anticipates commodity inflation of 2% to 2.5% and hourly inflation of 2.5% to 3%. Cracker Barrel has implemented cost savings measures, including a corporate restructuring that will result in annualized G&A savings of $20 million to $25 million. The company now expects full-year adjusted EBITDA of approximately $85 million to $100 million.

Valuation

With a P/S Ratio of 0.2 and an EV/EBITDA of 15.38, Cracker Barrel's valuation appears reasonable. Analysts estimate revenue growth of 3.7% next year. Given the company's efforts to improve operations and its loyalty program, which has over 11 million members, it is likely that Cracker Barrel will continue to see gradual improvement in its business. The company's dividend yield of 3.4% also provides a relatively stable source of return.

Cracker Barrel: Cracker Barrel's Q2 FY2026 Earnings: A Gradual Turnaround

Operational Improvements

Outlook and Guidance

Valuation

Cracker Barrel's A-Score