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Cracker Barrel's Logo Fiasco Hits Revenue Hard
10 Dec
Summary
- Cracker Barrel's revenue fell 5.7% to $797.2 million in the latest quarter.
- The company trimmed its full-year revenue forecast due to declining traffic.
- A botched logo and restaurant redesign plan led to customer backlash.
Cracker Barrel announced a decline in revenue for its fiscal first quarter, reporting $797.2 million, a 5.7% decrease year-over-year. This figure fell short of analyst expectations, prompting the restaurant chain to reduce its revenue forecast for the entire fiscal year. The company now anticipates revenues between $3.2 billion and $3.3 billion.
The financial impact stems from a public relations misstep earlier in the year when Cracker Barrel attempted to update its iconic logo and modernize its restaurant aesthetic. The proposed changes, which removed the beloved mascot and the "Old Country Store" branding, ignited significant customer protest and resistance to the store redesigns.
Following the negative reaction, Cracker Barrel reversed its decision on the logo and suspended remodeling plans. Despite these efforts, the brand continues to feel the repercussions, with same-store restaurant sales dropping 4.7% and retail sales falling 8.5% in the reported quarter. The company's shares saw a significant drop in after-hours trading.
