Why Cracker Barrel Rolled Higher Today
Key Points
Cracker Barrel beat expectations on both the top and bottom lines in last night's earnings report.
A big payment from settling credit card litigation turbocharged the restaurateur's profits.
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Cracker Barrel Old Country Store (NASDAQ: CBRL) stock cooked up a 27.6% gain through 11:05 a.m. ET Wednesday, after reporting better than expected earnings last night.
Heading into the company's fiscal Q3 2026 report, analysts predicted Cracker Barrel would lose $0.42 per share (pro forma) on sales of $777.5 million. But Cracker Barrel reported a surprise profit instead -- $0.29 per share -- and sales came in at $797.4 million.
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Cracker Barrel Q3 earnings
Not all the news was good... but some was downright great! On the minus side, Cracker Barrel sales slipped 2.9% year over year, and same-store sales were off 2.6% on the restaurant side, and 1.8% on merchandise. On the plus side, though, Cracker Barrel's earnings calculated under generally accepted accounting principles (GAAP) were $1.90 per share -- far more than the pro forma number noted above, and up 239% year over year.
Granted, most of the GAAP profit came from Cracker Barrel recognizing a one-time payment of $47.4 million from settling interchange fee litigation. Still, you can see why investors were pleased.
What's next for Cracker Barrel stock
Guidance news was similarly good. Full-year sales could reach $3.3 billion (down a disappointing 5.3% from last year's tally but better than the previous best-case forecast of $3.27 billion).
Cracker Barrel didn't give a firm GAAP earnings forecast. Management noted, however, that both commodity and wage inflation for its staff are expected to be "in the low 2% range," below previous estimates. This should be good news for profits and could allow Cracker Barrel to report smaller losses (or even a profit?) than the $1.36 per share analysts expect it to lose this year.
Fingers crossed.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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