Cracker Barrel Q4 FY2026 Earnings: EBITDA Rises as Revenue Falls

Cracker Barrel Old Country Store (Nasdaq: CBRL) reported Q4 fiscal 2026 revenue of $849.3 million, down 2.2% year over year, while diluted GAAP EPS rose to $0.54 from $0.30. Adjusted EBITDA increased about 11.4% to $62.1 million, though it included an approximately $9.1 million net benefit related to tariff refunds, as comparable-store restaurant sales declined 2.1% and retail comparable sales rose 0.7%. The quarter ended July 31, 2026, and included Maple Street Biscuit Company results through its July 20 divestiture.

Core Financial Results

Revenue weakness was concentrated in the restaurant channel, but both GAAP and adjusted profit measures improved. GAAP operating income was affected by several large items: a $47.4 million sale-leaseback gain was partly offset by a $27.0 million loss on the MSBC sale and $27.3 million of impairment and store-closing costs.

Adjusted EBITDA margin increased to 7.3% from 6.4%, while adjusted net margin rose to 2.6% from 1.9%. These adjusted figures exclude specified transaction, impairment, closing and executive-transition costs.

Adjusted net income, adjusted EPS and adjusted EBITDA are non-GAAP measures.

Business and Segment Performance

Comparable-store restaurant sales declined 2.1%, while comparable-store retail sales increased 0.7%. For Cracker Barrel stores alone, restaurant revenue fell to $686.2 million from $700.0 million, while retail revenue edged up to $150.8 million from $149.7 million.

The MSBC divestiture materially changed the store portfolio. Cracker Barrel ended the quarter with 655 Cracker Barrel locations and no MSBC units, compared with 725 total stores a year earlier. During the quarter, the company sold 35 MSBC locations and closed the remaining 16 as part of the divestiture after closing one other MSBC unit earlier in the period.

Tariff Refunds Helped Offset Sales and Cost Pressure

The cost-of-goods-sold ratio declined to 28.8% from 30.5%, and other store operating expenses fell to 23.7% of revenue from 24.9%. These improvements helped offset the restaurant sales decline.

However, labor costs increased to 37.5% of revenue from 36.5%, while general and administrative expenses rose to 7.7% from 5.8%. The approximately $9.1 million net tariff-refund benefit was also larger than the roughly $6.3 million year-over-year increase in adjusted EBITDA, meaning the EBITDA improvement was not solely attributable to underlying sales and operating-cost trends. Lower interest expense, which fell 37% to $3.0 million, provided additional support to GAAP earnings.

Cash Flow and Balance Sheet

For the full fiscal year, operating cash flow was $206.2 million, down from $218.9 million. Capital expenditures declined to $115.3 million from $158.6 million, leaving approximately $90.9 million of operating cash flow after capital spending, compared with about $60.3 million in fiscal 2025.

Total debt fell to $337.2 million from $484.6 million. Cracker Barrel repaid $150 million of short-term convertible notes and used approximately $77 million of net proceeds from the sale-leaseback of 26 stores toward debt reduction. The company had no outstanding revolving-credit borrowings, a total leverage ratio of 1.7 times and approximately $541.3 million of available credit capacity.

Cash and cash equivalents ended the year at $36.5 million, compared with $39.6 million, while inventories declined to $163.9 million from $180.6 million. The board also declared a quarterly dividend of $0.25 per share, payable November 12, 2026, to shareholders of record on October 16.

Fiscal 2027 Guidance

The fiscal 2027 outlook calls for positive comparable restaurant sales and adjusted EBITDA above fiscal 2026’s $147.7 million. With no new store openings planned, the revenue target relies primarily on existing locations, while comparisons will also reflect the completed MSBC divestiture.

The guidance therefore requires a reversal from the fourth quarter’s 2.1% restaurant comparable-sales decline while absorbing the expected commodity and wage inflation.

Management Commentary

CEO David Deno said the company was seeing continued improvement in its underlying traffic trend and key guest metrics. Management is focusing its strategy on food, guest experience and employees, with the main operating test being whether those initiatives translate into the positive comparable sales assumed in fiscal 2027 guidance.

Recent Insider Transactions

The provided six-month summary showed no insider purchases and no net shares purchased or sold, with total insider holdings of approximately 243,410 shares. The latest ten reported transactions consisted of four direct stock awards and six indirect sales by GMT Capital Corp., a holder of more than 10% of the company’s shares.

Stock awards are not open-market purchases, and the reported transactions alone do not establish the insiders’ views on Cracker Barrel’s outlook.

Risks Investors Should Watch

• Restaurant sales recovery: Fiscal 2027 guidance assumes 3% to 5% comparable restaurant sales growth after a 2.1% decline in the fourth quarter.
• Labor and administrative costs: Labor and G&A consumed larger percentages of quarterly revenue, while the company expects another 2.5% to 3.0% of hourly wage inflation.
• Earnings comparability: The tariff-refund benefit, sale-leaseback gain, MSBC divestiture loss and impairment charges make it important to separate recurring restaurant economics from transaction-related effects.
• Capital and portfolio execution: Cracker Barrel still carries $337.2 million of debt and plans $110 million to $125 million of capital spending, while its no-new-store plan places greater emphasis on improving existing locations.

Conclusion

Cracker Barrel’s fourth-quarter revenue remained under pressure as restaurant sales declined, but lower cost-of-goods and store operating expense ratios, a tariff-refund benefit and reduced interest expense supported profit growth. Debt reduction strengthened the balance sheet, while the MSBC divestiture simplified the portfolio. The main fiscal 2027 questions are whether restaurant comparable sales can return to growth and whether margins can improve despite continued commodity, wage and administrative cost pressures.