Cracker Barrel shares drop as logo change blowback dents restaurant traffic

By Juveria Tabassum

Sept 18 (Reuters) - Cracker Barrel CBRL.O shares fell about 3% on Thursday, after social media backlash around the restaurant chain's short-lived decision to change its decades-old logo hit customer traffic and prompted it to scrap store remodel plans.

The company was forced to return to its "Old Timer" logo after facing criticism from conservatives, including U.S. President Donald Trump, for removing the image of an overalls-clad man known as "Uncle Herschel" leaning against a barrel. Its shares have fallen nearly 16% since the logo change was first announced on August 19.

The stock was down as much as 9% in premarket trading, with the company forecasting annual revenue below analysts' estimate after markets closed on Wednesday.

The new logo stood for about a week, and the company had begun rolling out a more modern store layout at four restaurants, but has now dropped the plan, CEO Julie Felss Masino said on a post-earnings call on Wednesday. The company is reverting to its "Old-Timer" signage at the four locations and more traditional interiors, Masino said.

Store traffic fell about 8% since the new logo was launched, compared with about 1% decline in the first half of the month, its finance chief Craig Pommells said. Traffic is expected to be down 7% to 8% for the current quarter, but improve in the latter half of the year, he said.

"This is a bit of an unusual situation, and we've factored all of that in our guidance," Pommells said.

Cracker Barrel's plan to modernize its brand and stores was part of an effort to rekindle demand as consumers tempered spending on dining out due to high menu prices and sticky inflation.

The company forecast fiscal 2026 total revenue between $3.35 billion and $3.45 billion, below analysts' estimate of $3.48 billion, according to data compiled by LSEG. Marketing expenses are also expected to be higher for the year.

The fallout from the rebranding push-back "has been severe with no sign of let-up," but Cracker Barrel's efforts to bring back popular menu items and ramp up marketing could drive some improvement, said Truist Securities analyst Jake Bartlett.