In the wake of Cracker Barrel’s logo controversy and declining traffic, the brand is working to improve profitability, and one avenue is corporate layoffs.
The layoffs began during the brand’s first quarter, and another round is planned for the second quarter, according to CEO Julie Masino. The move is expected to result in annualized savings of $20 million to $25 million.
“While this will be understandably difficult for some of our corporate team members, it is necessary to successfully navigate the current headwinds, streamline the focus of our corporate functions, protect our balance sheet and ensure we can invest in the food and guest experience,” Masino said during Cracker Barrel’s Q1 earnings call.
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The announcement comes amid a rough financial quarter for the breakfast chain.
In August, the company stirred controversy on social media when it revealed a rebranding effort that included a modernized, minimalist logo that removed the iconic man in a rocking chair leaning on a barrel. Cracker Barrel faced a swift wave of criticism, even from President Donald Trump and the White House.
After a week, the chain decided to return to its regular logo. It also stopped remodeling efforts after poor feedback from customers. But the damage was done, and it didn’t help that the news happened during an already challenging macroeconomic environment. With these pressures converging onto Cracker Barrel, same-store sales slid 4.7 percent in the first quarter, fueled by 4.1 percent pricing, offset by a 7.3 percent drop in traffic and 1.2 percent decrease in menu mix.
Adjusted EBITDA was $7.2 million in Q1, down from $45.8 million last year. The chain also swung a net loss of $24.6 million versus net income of $4.8 million in Q1 2025.
Masino noted the company isn’t seeing major differences in performances among income and age groups. The under $60,000 households are “underperforming a little bit,” but still close to the over $60,000 and over $80,000 categories. The chain is seeing better performances with the over 55 and over 65 crowds, but not significantly more than the under 55 customers.
Thus far in Q2, traffic has dropped 11 percent, but has seemed to stabilize. Still, the chain earned nearly $110 million during the week of Thanksgiving and saw improvements in guest experience metrics.
“We wake up every single day thinking about how to drive traffic. What we are really focused on is doing that one guest at a time with great experiences in store, amazing food, great hospitality, attentive service,” Masino said. “That’s really the core focus. What we’re trying to do on top of that is regain trust.”
Focusing on cost savings—including the layoffs and reducing advertising spend by $12 million to $16 million compared to last year—is one strategy to get back on track. The other parts are operations and the guest experience.
Much of the efforts are about going back to what works. For instance, the brand launched phase one of a multi-part plan to enhance the back of house—including simplifying operations and increasing food quality and consistency. While the strategy delivered “meaningful savings,” the changes proved too difficult to execute and actually hurt food consistency, which wasn’t ideal considering the “heightened scrutiny around our brand,” Masino said.
So, similar to the logo change and remodels, Cracker Barrel returned to its previous processes. Going forward, the brand will rethink phase two of the initiative so that it’s easier for operators to handle.
“We’re reevaluating phase two. It’s still in test in a couple of districts and really continuing to work with that,” Masino said. “We’ve changed our in-store methodologies of testing, taking all of the learnings from this phase because more than ever, we have to remain committed to amazing food, great hospitality, and that guest experience. And so anything that starts to compromise that we can’t allow it, and that’s why we rolled back.”
Also, Cracker Barrel promoted 18-year veteran Doug Hisel to SVP, store operations. Under his guidance, the brand’s Google star rating—which is strongly correlated with its traffic, Masino says—has been at its highest levels since early 2020. Additionally, food taste, service, value, and experience have increased between 3 and 4 percent in October and even higher in November.
“These metrics are important leading indicators, and we expect they will translate into improved traffic over time,” Masino said.
As for the guest experience, Cracker Barrel is bringing back fan-favorite dishes, like the Country Fried Turkey, Cinnamon Swirl French Toast, and Turkey Sausage. These menu items are paired with a new breakfast burger, which is topped with the brand’s Hashbrown Casserole. More classic offerings are on the way next month, including Hamburger Steak and Eggs in a Basket.
Joining the menu innovation was a flurry of short-term value offers, including the BOGO Sunrise Pancake Special, BOGO Old Timer’s Breakfast, Kids Eat Free, All-You-Can-Eat National Pancake Day and Pancake Blocktober. Masino said the promotions “drove meaningful traffic” during the first quarter.
Cracker Barrel will keep the value messaging going during the holidays. This week, it will launch a limited-time offer for a free toy (or $5 off a higher-priced toy) with the purchase of a kids meal.
“[The toy promotion] really lets consumer be the driver in a time where value is so important to them,” Masino said. “And again, in a way that we can really create some emotional resonance with them in our restaurant and retail store.”
Another form of value is the loyalty program. There are now 10 million members in the program, which account for 40 percent of tracked sales.
As more customers join, the rewards platform has become an important tool in directly reaching guests. In fact, a few months ago, Cracker Barrel released “front porch feedback,” a program giving loyalty members an opportunity to provide opinions about their dining experience.
“This feedback, in addition to extensive guest research we conducted during the quarter, has been instrumental in guiding our action plan to improve food and experience and to reinforce guest perception of our strong value proposition,” Masino said.
Cracker Barrel projects it will earn $3.2 billion to $3.3 billion in sales in fiscal 2026, which assumes negative 8 to negative 10 percent traffic.
