Cracker Barrel to Post Q2 Earnings: Weak Traffic, Margin Pressure Loom

Cracker Barrel Old Country Store, Inc. CBRL is scheduled to report second-quarter fiscal 2026 results on March 4, 2026.

CBRL’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 69.5%.

Trend in the Estimate Revision of CBRL

The Zacks Consensus Estimate for the fiscal second-quarter bottom line is pegged at a loss of 10 cents. In the prior-year quarter, the company reported an earnings per share (EPS) of $1.38.

For revenues, the consensus mark is pegged at $895.8 million. The projection indicates a 5.7% fall from the year-ago quarter’s reported figure.

Let us take a look at how things might have shaped up in the quarter to be reported.

Factors Likely to Shape CBRL’s Quarterly Results

CBRL’s top line is likely to have been supported by targeted value promotions, menu resets and loyalty engagement, which helped offset weak traffic. Short-term offers such as BOGO breakfast deals, Kids Eat Free events and holiday promotions drove temporary traffic lifts, while the return of guest-favorite and seasonal menu items supported average check. Modest pricing actions and the expanding Cracker Barrel Rewards program, now representing about 40% of tracked sales, also aided repeat visits, while early improvements in food quality and service helped stabilize demand among core guests.

CBRL’s top line is likely to have declined year over year in second-quarter fiscal 2026 as traffic pressures intensified entering the quarter, with management noting traffic running down roughly 11%, worse than the fiscal first-quarter levels. The impact of earlier promotional activity faded, while a softer industry backdrop and cautious consumer spending limited demand recovery. At the same time, higher discounting and weaker dinner traffic are expected to pressure menu mix, reducing revenue leverage despite pricing actions.

Retail sales are also likely to have remained under pressure due to lower store traffic and weaker attachment rates. These headwinds are compounded by a deliberate pullback in advertising spend, which constrains near-term traffic stimulation, and lingering brand trust issues, pointing to a gradual rather than immediate sales recovery. Our model predicts fiscal second-quarter restaurant comps to decline 6.7% year over year. 

CBRL’s bottom line is likely to have been hurt by cost deleverage from lower sales, which pushed labor and operating expenses higher as a percentage of revenue despite efforts to protect the guest experience. Profitability was further pressured by commodity inflation, higher food waste tied to operational changes and increased discounting. Elevated advertising spends, one-time costs related to the general managers’ conference, higher maintenance accruals and corporate restructuring charges also weighed on margins, collectively compressing earnings during the period.

Our model predicts fiscal second-quarter adjusted EBITDA to fall 49.5% year over year to $37.7 million.

What Our Model Says About CBRL Stock

Our proven model does not conclusively predict an earnings beat for Cracker Barrel this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that is not the case here.

Earnings ESP for CBRL: Cracker Barrel currently has an Earnings ESP of +275.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cracker Barrel’s Zacks Rank: The company has a Zacks Rank #4 (Sell) at present.

Stocks Poised to Beat Earnings Estimates

Here are some companies, which, according to our model, have the right combination of elements to post an earnings beat:

Dollar General Corporation DG currently has an Earnings ESP of +8.32% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Dollar General is likely to register growth in the top line when it reports fourth-quarter fiscal 2025 results. The consensus mark for DG’s quarterly revenues is pegged at $10.8 billion, which indicates a 4.4% rise from the figure reported in the prior-year quarter. The consensus mark for Dollar General’s quarterly earnings has moved a penny in the past 7 days to $1.60 per share. The consensus estimate indicates a drop of 4.8% from the year-ago quarter’s actual. DG has an average trailing four-quarter earnings surprise of 22.9%.

Ross Stores, Inc. ROST currently has an Earnings ESP of +2.28% and a Zacks Rank of 2. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter fiscal 2025 results. 

The consensus mark for ROST’s quarterly revenues is pegged at $6.4 billion, which indicates a 7.8% rise from the figure reported in the prior-year quarter. The consensus mark for ROST’s quarterly earnings has moved a penny in the past 7 days to $1.88 per share. The consensus estimate indicates an increase of 5% from the year-ago quarter’s actual. ROST has an average trailing four-quarter earnings surprise of 6.7%.

lululemon athletica LULU currently has an Earnings ESP of +0.89% and a Zacks Rank of 3. LULU is likely to register top-line growth when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $11.1 billion, which indicates 4.6% growth from the prior-year quarter.

The consensus estimate for earnings has moved down a couple of cents in the past 30 days to $4.74 per share, which implies a 22.8% decrease from the year-ago quarter's actual. LULU has an average trailing four-quarter earnings surprise of 7.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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