Cracker Barrel Stock Surges 23% on Strong Earnings and Raised Guidance

Cracker Barrel Old Country Store reported adjusted profit per share of 29 cents for the third quarter ended May 1, beating analyst estimates of a 45-cent loss, prompting a 23% stock price increase on Wednesday. The company raised its full-year revenue guidance to $3.27 billion to $3.30 billion (from $3.24 billion to $3.27 billion) and adjusted EBITDA guidance to $120 million to $125 million (from $85 million to $100 million). The positive results come after the company faced significant consumer backlash in August when it changed its decades-old logo featuring "Uncle Herschel," an overalls-clad man leaning against a barrel, which drew criticism from conservative consumers and President Trump. Store traffic had declined following the logo change, and the stock had dropped approximately 40% from its peak. However, executives reported that store visits are improving gradually and consumers are responding positively to new menu offerings including add-ons and value-focused bundled items. Wells Fargo upgraded the stock to "overweight" rating, citing confirmation that a turnaround is underway.