Cracker Barrel Old Country Store, Inc. CBRL is taking decisive steps to strengthen its financial position and sharpen focus on the core business.
It recently completed a sale-leaseback transaction involving 26 company-owned Cracker Barrel stores and exited the Maple Street Biscuit Company business. These actions, coupled with an improved fiscal 2026 outlook, reflect management's strategy to enhance profitability, reduce leverage and create long-term shareholder value.
Cracker Barrel generated approximately $77 million in net proceeds from the sale-leaseback transaction with an institutional real estate investor. The company intends to use the proceeds primarily to reduce debt, improving its balance sheet and financial flexibility. The transaction is also tax-efficient, enabling Cracker Barrel to utilize capital loss carryforwards that would otherwise have expired while unlocking value from a portion of its owned real estate portfolio.
Maple Street Exit Sharpens Focus on Core Brand
Alongside the real estate transaction, Cracker Barrel completed the sale of certain assets of Maple Street Biscuit Company, including the brand's trademark and assets associated with 35 restaurant locations, to Biscuit Belly, LLC. The company also announced that it will close the remaining 16 Maple Street locations, marking the complete exit from the business.
Although the divestiture will result in near-term costs, management expects it to improve earnings over time. Cracker Barrel anticipates recording non-cash charges of approximately $37-$39 million in the fourth quarter of fiscal 2026, along with additional cash charges of roughly $6-$8 million that will be incurred during fiscal 2026 and 2027 as it completes the exit. Since Maple Street accounted for less than 2% of the company's annual revenues, it expects the divestiture to become accretive to adjusted EBITDA beginning in fiscal 2027.
Management Highlights Long-Term Value Creation
President and CEO Julie Masino said these initiatives reflect Cracker Barrel's disciplined approach to managing both its operations and balance sheet. According to Masino, the sale-leaseback transaction enables the company to monetize owned real estate at an attractive valuation while reducing debt, and the Maple Street divestiture allows management to concentrate on the flagship Cracker Barrel brand, supporting stronger profitability over the long term.
Company Raises Fiscal 2026 Profitability Outlook
Cracker Barrel also provided a business update for the fiscal fourth quarter. During the first 11 weeks of the quarter, comparable restaurant sales declined approximately 2.5% year over year, while comparable retail sales increased approximately 0.5%. While restaurant traffic remained under pressure, the retail business continued to post modest growth.
Reflecting confidence in its performance, Cracker Barrel now expects revenues to reach or exceed the upper end of the previously guided fiscal 2026 range of $3.27-$3.30 billion. The company also expects adjusted EBITDA to surpass its earlier outlook of $120-$125 million, signaling stronger profitability than previously anticipated.
CBRL Remains Focused on Long-Term Growth
Cracker Barrel's latest strategic actions highlight a disciplined approach to portfolio optimization and capital allocation. By reducing debt, monetizing select real estate assets, exiting a non-core business and raising its profitability outlook, the company is reinforcing its commitment to the core brand. These initiatives should strengthen its financial foundation and position the company for improved earnings growth and greater shareholder value over the long run.
CBRL’s Price Performance, Valuation & Estimates
Shares of Cracker Barrel have surged 74.7% in the past three months against the industry’s 3.4% decline. In the same time frame, BJ's Restaurants, Inc. BJRI and The Cheesecake Factory Incorporated CAKE have gained 77.7% and 36.1%, respectively.
CBRL Three-Month Price Performance
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From a valuation standpoint, CBRL trades at a forward price-to-sales (P/S) multiple of 0.35, below the industry’s average of 3.33. On the other hand, BJ's Restaurants and The Cheesecake Factory are trading at 0.99X and 1.05X, respectively.
CBRL’s P/S Ratio (Forward 12-Month) vs. Industry
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The Zacks Consensus Estimate for CBRL’s fiscal 2027 earnings per share (EPS) implies a 181.3% year-over-year increase. The EPS estimates for fiscal 2027 have decreased in the past 30 days.
EPS Trend of CBRL Stock
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CBRL’s Zacks Rank
CBRL stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).