Why Cracker Barrel Stock Is Cracking Up

Key Points

• Cracker Barrel is investing $700 million in a corporate rebranding and turnaround attempt.

• The company has announced a new, simplified logo that the CEO loves -- but customers seem to hate.

• Cracker Barrel didn't need to do this, and could end up taking a large charge to earnings for its misstep.

• 10 stocks we like better than Cracker Barrel Old Country Store ›

Shares of Cracker Barrel Old Country Store (NASDAQ: CBRL) stock, which runs the famed chain of "old country stores" and restaurants, is cracking under the pressure of a social media outcry today.

Cracker Barrel's old logo. Image source: Cracker Barrel.

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For the first time in 47 years, reports USA Today, Cracker Barrel will change its logo, removing the iconic old guy sitting on a wicker chair and leaning on a barrel, and the "old country store" tag line, and replacing it with a simple company name, surrounded by a six-sided figure with rounded corners.

And Cracker Barrel's new logo. Image source: Cracker Barrel.

Consumer revolt at Cracker Barrel

In a press release Tuesday, Cracker Barrel announced its $700 million transformation features "decluttered" stores and "crave-worthy new and returning menu items, refreshed restaurant remodels, [and] an enhanced brand look and feel." CEO Julie Felss Masino, who took over the restaurant chain last year, says the campaign will help the company "really regain relevancy."

To hear Masino tell it, the campaign is already a hit. Interviewed by ABC News, she insisted "people like what we're doing" and called customer feedback "overwhelmingly positive."

But not everyone agrees. Cracker Barrel's getting shellacked on social media, with comments describing the change as "horrible" and "another little piece of culture dying off."

Granted, logos are a matter of taste, but as one post on X pointed out, "if it's not broke, don't fix it."

Is Cracker Barrel stock a sell?

I admit, I find myself in the latter camp, and wondering why -- if it had to steal a page from anyone's book -- Cracker Barrel decided to go the FedEx route -- which years ago took an $891 million charge to earnings to kill off the "Kinko's" brand after buying that company (which was a lot of money back in 2009!).

I suspect Cracker Barrel's barreling toward the same fate. It's probably time to sell.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FedEx. The Motley Fool recommends Cracker Barrel Old Country Store. The Motley Fool has a disclosure policy.