Cracker Barrel Old Country Store Inc. CBRL is bracing for a $25 million financial impact from the Donald Trump administration’s tariffs in the coming fiscal year, forcing the company to significantly reduce the number of products in its famous gift shops and aggressively renegotiate deals with its suppliers.
Cracker Barrel fell in after-hours. Check out the stock price here.
CBRL To Reduce Store Products By 10% To Fight Tariffs
The strategy was detailed by executives during the company’s fourth-quarter earnings call on Wednesday as a direct response to the escalating costs. The most significant change for customers will be a smaller selection in the brand’s Old Country Store.
According to Senior Vice President and CFO Craig Pommells, the total number of retail items, or SKUs, is expected to be cut by approximately 10% in fiscal 2026 as the company purges unprofitable merchandise from its shelves.
Pommells was blunt about the company’s rationale for trimming its retail assortment. “If we can’t make a reasonable profit on it, then we don’t need to sell it,” he told investors, explaining that the company is re-evaluating every product in light of the tariff costs.
Suppliers To Absorb Financial Burden From Tariffs
In addition to cutting products, Cracker Barrel is actively pressuring its suppliers to absorb some of the financial burden. Pommells confirmed that a primary tactic has been to secure better terms from its partners.
“The vast, vast majority of that is being mitigated by a few things. Number one is vendor negotiations, and the team has been working really hard on that and have had a lot of success,” he said.
Other mitigation efforts include adjusting pricing and shifting the country of origin for some of its products.
See Also: Cracker Barrel Stock Falls On Q4 Earnings: Revenue Beat, EPS Miss, Soft Guidance And More
CBRL’s Rebrand Fiasco Caused 8% Traffic Plunge
These aggressive cost-saving measures on the retail side come as Cracker Barrel navigates a turbulent period, highlighted by a self-inflicted crisis in its core restaurant business.
Following a recent, and since-reversed, brand modernization attempt, the company has suffered an approximately 8% plunge in customer traffic since mid-August.
CEO Julie Masino directly addressed the customer backlash on the call, admitting the company had “misstepped” and was now reversing the unpopular changes.
Cracker Barrel Q4 Earnings Snapshot
CBRL reported fourth-quarter revenue of $868.09 million, beating analyst estimates of $855.30 million and an adjusted earnings of 74 cents per share, missing analyst estimates of 80 cents per share.
It expects fiscal 2026 revenue to be in the range of $3.35 billion to $3.45 billion, versus estimates of $3.47 billion. The company anticipates full-year adjusted EBITDA of $150 million to $190 million. Cracker Barrel also expects to open two new stores in fiscal 2026.
Price Action
The stock fell 3.16% on Wednesday and 9.28% in after-hours. It was down 9.71% year-to-date and 19.32% higher over the year.
Benzinga’s Edge Stock Rankings indicate that CBRL maintains a weaker price trend in the short, medium, and long terms. However, the stock’s value ranking is relatively strong. Additional performance details are available here.
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell on Wednesday. The SPY was down 0.12% at $659.18, while the QQQ declined 0.20% to $590.00, according to Benzinga Pro data.
On Thursday, the futures of the Dow Jones, S&P 500, and Nasdaq 100 indices were higher.
Read Next:
Cracker Barrel Tumbles 12.5% In 5 Days As Heavy Shorting Spikes Volatility: Analysts Says Long-To-Short Ratio Halved Before Sell-Off
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Ken Wolter / Shutterstock