During Cracker Barrel’s Q3 earnings call, CEO Julie Masino reiterated a point she’s made several times before: the breakfast brand’s transformation is a three-year plan.
That’s nearly 1,100 days. A lot can happen during that time.
For instance, few, if any, predicted the magnitude of consumer pullback in February. Not many foresaw the weather being as bad as it was either. Still though, Q3 restaurant same-store sales lifted 1 percent, marking the fourth straight quarter of positive comps.
Tariffs are another bump along the road. However, it’s not one that caught Cracker Barrel totally off-guard. Masino said “teams have been thinking about tariffs for months,” noting that it was a hot topic during the presidential campaign last year.
The 658-unit company expects tariffs to impact Q4 EBITDA by approximately $5 million, but that hasn’t erased Cracker Barrel’s confidence. Because Q3 results exceeded expectations, the chain increased its annual EBITDA outlook to $215 million to $225 million, which also takes into account the hit from the tariffs.
“I’m actually very pleased about how we’ve been able to absorb the [tariff] impact so far here in fiscal ’25 and what that looks like as we move forward,” Masino said during the brand’s Q3 earnings call.
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Roughly one-third of Cracker Barrel’s retail products are sourced directly from Chinese vendors. The brand also has indirect exposure related to products purchased through U.S. vendors that source from China.
To mitigate these headwinds, Cracker Barrel is “aggressively” negotiating with vendors, seeking alternate sourcing, and also raising prices.
“The teams are really working with vendors. Our vendor partners have been tremendous through this exercise. We’ve been able to negotiate with them,” Masino said. “They are negotiating with their factories. We’ve been alternate sourcing for a while. Are there different parts of the world where some of these goods can come from? And then as the last lever, look, pricing is an option. But we’re being very thoughtful about pricing because this business is so discretionary. And we know from work that we’ve done around the transformation that value is important in this business just like it is in our restaurant business.”
The brand has also used tariffs as an opportunity to accelerate the reinvention of its retail business, like examining the number of SKUs and themes and what time they hit the floor. As an example, Cracker Barrel is known for putting out Christmas and Halloween apparel early. Now, the company is readjusting some of that timing to be more aligned with consumer demand.
Cracker Barrel plans to share more in September about what it expects from tariffs when it shares annual guidance for fiscal 2026.
“It will go like a couple of clicks deeper on it at that point in time, but know that the teams are really working as we push our strategy forward to absorb this tariff situation and continue to just check and adjust against it,” Masino said.
While Cracker Barrel battles tariffs and streamlines its retail business, it expects to do the same in its restaurant kitchens.
During Q3, it implemented phase 1 of its back-of-house optimization initiative. This step is focused on process simplification to improve quality and profitability while making employees’ lives easier. Feedback has been positive thus far, and workers have found tasks easier to execute.
Phase 2 will be about deploying pre-chopped and pre-sliced ingredients to reduce prepping time in the kitchen. The third and final phase will look at bringing in equipment solutions.
Cracker Barrel expects to see benefits starting in Q4 and fiscal 2026.
Cracker Barrel is also rolling into Q4 with a full slate of brand initiatives designed to strengthen guest engagement and bring its revitalization strategy to life.
There is notable momentum behind the company’s brand refinement efforts, which are set to culminate in an official relaunch this August. The work includes updated visuals, more targeted marketing, and a stronger presence in channels that resonate with both loyal and potential guests.
One of the most visible moves is Cracker Barrel’s new partnership with Speedway Motorsports, which debuted with the Cracker Barrel 400 NASCAR race—held just miles from the company’s Lebanon, Tennessee, headquarters.
The race also served as a high-profile launchpad for the return of Cracker Barrel’s Campfire meals, a nostalgic fan-favorite that’s back for the first time since 2018. Now featuring improved recipes and operational enhancements, the lineup includes returning beef and chicken varieties along with a new shrimp and andouille sausage option, all starting at $10.99. The brand is backing the relaunch with a robust integrated marketing campaign that also supports its evolving brand identity.
Additionally, social media is playing a key role in that transformation, as Cracker Barrel works with creators and leans into cultural conversations to foster more authentic engagement. Loyalty remains another major lever. The company recently hit its fiscal 2025 goal of 8 million Cracker Barrel Rewards members, with over a third of transactions now linked to the program. Early access to menu items like a new s’mores brownie skillet has helped drive excitement and exclusivity for members.
Along with that, technology is increasingly central to the brand’s toolkit. Cracker Barrel is piloting AI-powered personalization within its rewards program, which has already led to a mid-single-digit lift in revenue per member. Machine learning is also enhancing operations—from improving traffic forecasting and labor planning to speeding up guest relations response times and tightening cybersecurity.
“All of this work is anchored on our three business imperatives of driving relevancy, which is market share, delivering food and experiences guests love and growing profitability,” Masino said. “We remain confident in our plan and our ability to execute and achieving these imperatives will drive significant long-term value creation.”
