Restaurant company Cracker Barrel (NASDAQ: CBRL) met Wall Streets revenue expectations in Q3 CY2025, but sales fell by 5.7% year on year to $797.2 million. On the other hand, the company’s full-year revenue guidance of $3.25 billion at the midpoint came in 3.7% below analysts’ estimates. Its non-GAAP loss of $0.74 per share was 1.8% below analysts’ consensus estimates.

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Cracker Barrel President and Chief Executive Officer Julie Masino said, "First quarter results were below our expectations amid unique and ongoing headwinds. We have adjusted our operational initiatives, menu, and marketing to ensure we are consistently delivering delicious food and exceptional experiences. Additionally, we are executing a variety of cost savings initiatives to bolster our financial performance. Although our recovery will take time, our teams are more committed than ever, and we are confident that we will regain momentum."

Company Overview

Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ: CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $3.44 billion in revenue over the past 12 months, Cracker Barrel is one of the larger restaurant chains in the industry and benefits from a well-known brand that influences consumer purchasing decisions. However, its scale is a double-edged sword because there are only a finite of number places to build restaurants, making it harder to find incremental growth. To expand meaningfully, Cracker Barrel likely needs to tweak its prices, start new chains, or enter new markets.

As you can see below, Cracker Barrel’s 1.8% annualized revenue growth over the last six years (we compare to 2019 to normalize for COVID-19 impacts) was weak as its restaurant footprint remained unchanged and it barely increased sales at existing, established dining locations.

This quarter, Cracker Barrel reported a rather uninspiring 5.7% year-on-year revenue decline to $797.2 million of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to decline by 1% over the next 12 months, a slight deceleration versus the last six years. This projection is underwhelming and suggests its menu offerings will face some demand challenges.

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Restaurant Performance

Number of Restaurants

Cracker Barrel operated 710 locations in the latest quarter, and over the last two years, has kept its restaurant count flat while other restaurant businesses have opted for growth.

When a chain doesn’t open many new restaurants, it usually means there’s stable demand for its meals and it’s focused on improving operational efficiency to increase profitability.

Same-Store Sales

The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

Cracker Barrel’s demand within its existing dining locations has been relatively stable over the last two years but was below most restaurant chains. On average, the company’s same-store sales have grown by 1.2% per year. Given its flat restaurant base over the same period, this performance stems from a mixture of higher prices and increased foot traffic at existing locations.

In the latest quarter, Cracker Barrel’s same-store sales fell by 4.7% year on year. This decline was a reversal from its historical levels.

Key Takeaways from Cracker Barrel’s Q3 Results

We struggled to find many positives in these results. Same-stores sales declined meaningfully, leading to an EBITDA miss in the quarter. Looking ahead, the company's full-year revenue guidance missed and its full-year EBITDA guidance also fell short of Wall Street’s estimates. Overall, this quarter was bad. The stock traded down 12% to $23.65 immediately after reporting.

Cracker Barrel’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.