By Juveria Tabassum
(Reuters) -Cracker Barrel shares fell practically 10% earlier than the bell on Thursday, after social media backlash across the restaurant chain’s short-lived choice to vary its decades-old brand hit buyer visitors and prompted it to scrap retailer transform plans.
The corporate was compelled to return to its “Outdated Timer” brand after dealing with criticism from conservatives, together with U.S. President Donald Trump, for eradicating the picture of an overalls-clad man referred to as “Uncle Herschel” leaning towards a barrel. Its shares have fallen practically 16% for the reason that brand change was first introduced on August 19.
The brand new brand stood for a few week, and the corporate had begun rolling out a extra fashionable retailer structure at 4 eating places, however has now dropped the plan, CEO Julie Felss Masino mentioned on a post-earnings name on Wednesday. The corporate is reverting to its “Outdated-Timer” signage on the 4 areas and extra conventional interiors, Masino mentioned.
Retailer visitors fell about 8% for the reason that new brand was launched, in contrast with about 1% decline within the first half of the month, its finance chief Craig Pommells mentioned. Visitors is predicted to be down 7% to eight% for the present quarter, however enhance within the latter half of the yr, he mentioned.
“It is a little bit of an uncommon scenario, and we have factored all of that in our steering,” Pommells mentioned.
Cracker Barrel’s plan to modernize its model and shops was a part of an effort to rekindle demand as customers tempered spending on eating out as a consequence of excessive menu costs and sticky inflation.
The corporate, which introduced fourth-quarter outcomes after markets on Wednesday, forecast fiscal 2026 complete income between $3.35 billion and $3.45 billion, beneath analysts’ estimate of $3.48 billion, in keeping with information compiled by LSEG. Advertising bills are additionally anticipated to be greater for the yr.
The fallout from the rebranding push-back “has been extreme with no signal of let-up,” however Cracker Barrel’s efforts to convey again well-liked menu objects and ramp up advertising and marketing might drive some enchancment, mentioned Truist Securities analyst Jake Bartlett.
(Reporting by Juveria Tabassum in Bengaluru; Modifying by Shilpi Majumdar)
