Fourth-quarter results beat forecasts, and the chain guided to a return to same-store sales growth in fiscal 2027. The full year still showed revenue and profit falling.
Dave Deno used his first earnings call as Cracker Barrel's chief executive to deliver a message investors did not necessarily expect from a new leader: most of the strategy he inherited is staying.
Deno, who took over on Aug. 10, said the company has largely focused on the right areas and that he is working to refine a strategy centered on food and customers rather than replace it. Shares rose about 6.5% to $48.43.
The fourth quarter gave him a better starting point than the full year. Revenue fell 2.2% to $849.3 million but topped the $834.6 million analysts had expected. Adjusted earnings rose to 99 cents a share from 74 cents a year earlier, and diluted earnings climbed to 54 cents from 30 cents. Comparable restaurant sales fell 2.1%, while comparable retail sales rose 0.7%.
The fiscal year was harder. Revenue fell 5% to $3.32 billion. Adjusted earnings dropped to 80 cents a share from $3.16, and adjusted EBITDA fell to $147.7 million from $224.3 million.
The balance sheet moved in the other direction. Cracker Barrel completed a sale-leaseback of 26 stores that raised about $77 million, sold its Maple Street Biscuit Company chain and repaid $150 million of maturing convertible notes. Total debt fell to $337.2 million.
The fiscal 2027 outlook is where the recovery case sits. The company expects revenue of $3.325 billion to $3.4 billion, comparable restaurant sales growth of 3% to 5%, and adjusted EBITDA of $180 million to $200 million. Capital spending is planned at $110 million to $125 million.
Those targets imply a sharp turn. Adjusted EBITDA at the low end of the range would be about 22% above fiscal 2026. At the high end, it would be about 35% higher. Comparable restaurant sales would need to swing from a 2.1% decline in the fourth quarter to growth of at least 3% over the full year.
The backdrop is not easy. McDonald's chief executive said on the same day that he expects flat traffic and sticky inflation to persist across the restaurant industry, and industry operators surveyed by the National Restaurant Association reported a net decline in customer traffic in every month but one from August 2025 to July 2026.
Deno's decision to keep the plan puts the weight on execution rather than on a new direction. The first quarters of fiscal 2027 will show whether comparable restaurant sales turn positive on schedule, which is the number the EBITDA recovery depends on.