Cracker Barrel Old Country Store, Inc. Fiscal 2026 Form 10-K Summary
Business context and reporting period
Cracker Barrel operates a combined full-service restaurant and gift-shop concept in the United States. The fiscal year ended July 31, 2026, comprised 52 weeks; fiscal 2025 also comprised 52 weeks, while fiscal 2024 comprised 53 weeks. As of September 11, 2026, the Company operated 655 company-owned stores in 43 states and had approximately 74,500 employees. Restaurant sales represented 81.4% of fiscal 2026 revenue and retail sales represented 18.6%.
During fiscal 2026, the Company sold assets associated with 35 Maple Street Biscuit Company locations and closed its remaining 16 locations. It opened two Cracker Barrel stores and closed four. Management currently does not plan to open new stores during fiscal 2027.
Financial performance and key metrics
| Metric | 2026 | 2025 | Change |
|---|---|---|---|
| Total revenue | $3,318.7 million | $3,483.7 million | Down 4.7% |
| Restaurant revenue | $2,701.8 million | $2,831.3 million | Down 4.6% |
| Retail revenue | $616.9 million | $652.4 million | Down 5.4% |
| Operating income (loss) | $(12.5) million | $55.0 million | Down $67.5 million |
| Income before taxes | $20.6 million | $37.7 million | Down 45.5% |
| Net income | $31.7 million | $46.4 million | Down 31.7% |
| Diluted EPS | $1.40 | $2.06 | Down 32.0% |
| Net cash from operating activities | $206.2 million | $218.9 million | Down $12.7 million |
Operating margin declined to negative 0.4% from 1.6%, while net margin declined to 1.0% from 1.3%. Labor and related expenses increased to 37.3% of revenue from 36.0%, and other store operating expenses increased to 25.5% from 24.6%. Restaurant cost of goods sold increased to 26.5% of restaurant revenue from 26.4%, reflecting commodity inflation, higher food waste, discounts and mix. Retail cost of goods sold improved to 50.2% of retail revenue from 51.0%, primarily because of $15.0 million of tariff refunds.
Comparable restaurant sales decreased 4.2%, comparable retail sales decreased 5.2%, and combined comparable restaurant and retail sales decreased 4.4%. Comparable restaurant traffic declined 7.6%, partially offset by a 3.7% increase in average check, including a 4.3% average menu price increase. Off-premise channels accounted for approximately 20% of restaurant sales.
Cash flow, liquidity, debt and capital allocation
- Cash and cash equivalents were $36.5 million at July 31, 2026, compared with $39.6 million at August 1, 2025.
- Cash flow from operations was $206.2 million. Investing cash flow was $(34.2) million, including $117.8 million of property and equipment purchases and $81.1 million of proceeds from property sales. Financing cash flow was $(175.1) million, principally reflecting repayment of $150.0 million of 2026 convertible notes and dividends.
- The Company had no borrowings under its $550.0 million revolving credit facility and had $541.3 million of availability after $8.7 million of standby letters of credit. It was in compliance with all facility covenants.
- Long-term debt consisted principally of $345.0 million principal amount of 1.75% convertible senior notes due September 2030, with a carrying value of $337.2 million. The remaining $150.0 million of 2026 convertible notes was repaid at maturity in June 2026.
- Operating lease liabilities totaled $698.8 million on a present-value basis, with $1.08 billion of undiscounted future minimum lease payments and a weighted-average remaining lease term of 15.22 years.
- Capital expenditures were $115.3 million, compared with $158.6 million in 2025. The Company expects fiscal 2027 capital expenditures of approximately $110 million to $125 million.
- The Company paid regular dividends of $1.00 per share in fiscal 2026 and fiscal 2025. The Board declared a $0.25 per-share dividend payable in November 2026. No shares were repurchased in fiscal 2026 or fiscal 2025, although a $100 million repurchase authorization remains available through September 30, 2027.
- Working capital was negative $200.4 million, improved from negative $312.5 million, primarily because the 2026 notes were repaid and accounts payable and inventory balances declined.
Material changes versus the prior comparable period
- Revenue declined 4.7%, driven primarily by lower guest traffic, negative customer reactions to brand initiatives, inflationary pressures, higher consumer debt and lower savings rates.
- The Company reverted to its former logo and discontinued modern test-store remodels during the first quarter after negative publicity and customer reactions.
- Operating income shifted from $55.0 million of income to a $12.5 million loss. Fiscal 2026 included $27.0 million of loss on the MSBC asset sale, $31.2 million of impairment and store-closing costs, and a $47.4 million sale-and-leaseback gain.
- The Company received $47.4 million, net of legal fees, from a settlement resolving interchange-fee litigation and $12.6 million from settlements involving poultry and pork suppliers.
- Interest expense declined to $14.4 million from $20.5 million, primarily because of lower average revolving-credit borrowings.
- Fiscal 2026 included corporate restructuring and CEO transition costs. David Deno became President and Chief Executive Officer on August 10, 2026, replacing Julie Masino.
Guidance, outlook, risks and unusual items
- Management expects approximately 3.0% commodity inflation and 2.5% to 3.0% wage inflation in fiscal 2027. It expects an income tax benefit of approximately $4 million to $8 million.
- Management believes available cash, operating cash flow and revolving-credit capacity will fund operations, debt service, dividends, capital expenditures and working-capital requirements for the next 12 months and the foreseeable future, subject to facility conditions and covenant compliance.
- Key risks include sustained inflation in food, labor, transportation and utilities; consumer traffic and discretionary-spending weakness; intense restaurant and retail competition; labor availability and wage pressure; tariffs and reliance on foreign-sourced retail merchandise; dependence on a single principal retail distribution facility; cybersecurity and data-privacy incidents; extreme weather; litigation; regulatory changes; and execution risk related to strategic initiatives.
- The Company self-insures significant portions of workers’ compensation, general liability and health-care costs. Insurance reserves are based on actuarial estimates and were identified as the critical audit matter.
- The shareholder rights agreement expires February 27, 2027 and may be triggered if a person or group acquires 20% or more of the common stock, subject to qualifying-offer provisions.
- The Company reported no cybersecurity incidents that had materially affected, or were reasonably likely to materially affect, its operations, business strategy or financial condition. Management and Deloitte concluded that disclosure controls and internal control over financial reporting were effective as of July 31, 2026, and Deloitte issued unqualified audit opinions.
Most important facts for investors to verify
- Whether traffic and comparable-store sales stabilize after the branding controversy and the reversal of the new logo and remodel initiatives.
- Whether fiscal 2027 commodity, wage and other cost inflation remains within management’s stated assumptions and whether pricing can offset those costs without further traffic erosion.
- The Company’s ability to sustain dividends and any future share repurchases under revolving-credit covenants and liquidity requirements.
- The financial and operational effects of the MSBC exit, store closures, impairments and the 2026 sale-and-leaseback transaction.
- Future conversion, repurchase or cash-settlement requirements associated with the $345 million of 1.75% convertible notes due 2030, including potential dilution.
- The adequacy of liquidity after considering lease obligations, purchase commitments of $151.5 million, tax contingencies of $16.3 million and potential self-insured claims.
- The duration and potential financial impact of litigation, supplier settlements, tariff changes, cybersecurity events and other contingencies not fully quantifiable in the filing.