Cracker Barrel stock soars 30% as earnings beat sparks short squeeze

Cracker Barrel Old Country Store CBRL shares surged on Wednesday after the restaurant chain reported better-than-expected fiscal third-quarter results and raised its full-year outlook.

The strong report prompted analysts to increase price targets and helped fuel a sharp short squeeze in the stock.

The stock climbed as much as 30% during morning trading.

The rally extended gains from earlier in the week, with shares up roughly 40% over the past several sessions.

Despite the recent surge, the stock remains below levels reached last year.

The move came after Cracker Barrel delivered an earnings surprise that exceeded Wall Street expectations and provided an encouraging update on its ongoing turnaround efforts.

Earnings beat expectations, outlook raised

For its fiscal third quarter, Cracker Barrel reported adjusted earnings of 29 cents per share.

Analysts surveyed by FactSet had expected an adjusted loss of 48 cents per share.

Revenue totaled USD 797.4 million (approx. $1.2 billion), ahead of analyst expectations of USD 776.7 million (approx. $1.1 billion).

While revenue declined from USD 821.1 million (approx. $1.2 billion) a year earlier, the drop was smaller than analysts had anticipated.

The company reported net income of USD 42.8 million (approx. $62.4 million), or $1.90 per share, compared with USD 12.6 million (approx. $18.4 million), or 56 cents per share, in the prior-year period.

Results included a USD 47.4 million (approx. $69.1 million) litigation settlement that boosted reported earnings.

Management said profitability benefited from cost-cutting efforts, including a corporate restructuring completed during the second quarter.

The restructuring is expected to generate annualized savings of between USD 20 million (approx. $29.1 million) and USD 25 million (approx. $36.4 million).

Following the results, Cracker Barrel raised its full-year revenue forecast to a range of USD 3.3 billion (approx. $4.8 billion) to USD 3.3 billion (approx. $4.8 billion), up from prior guidance of USD 3.2 billion (approx. $4.7 billion) to USD 3.3 billion (approx. $4.8 billion).

The company also increased its adjusted EBITDA outlook to between USD 120 million (approx. $174.9 million) and USD 125 million (approx. $182.2 million), compared with previous guidance of USD 85 million (approx. $123.9 million) to USD 100 million (approx. $145.7 million).

Short squeeze accelerates rally

The earnings beat arrived at a challenging moment for short sellers.

According to MarketSurge data, approximately 27% of Cracker Barrel's float was sold short entering Wednesday's session.

A short interest level above 20% is generally considered exceptionally high.

As the stock rose following earnings, short sellers faced increasing pressure to buy back shares to limit losses, adding further momentum to the rally.

Analyst sentiment also improved after the report.

Citi, UBS, and Wells Fargo all raised their price targets on the stock. Wells Fargo upgraded Cracker Barrel to "overweight" from "equal weight" and lifted its target price to $50 from $35.

The stock had already gained around 8% across Monday and Tuesday before Wednesday's surge accelerated the move.

Turnaround efforts show signs of progress

The company continues to work through challenges that emerged after a controversial rebranding effort in 2025.

Cracker Barrel faced backlash after changing its logo and redesigning parts of its restaurants.

The company later reversed those changes and restored elements of its traditional brand identity, including older food preparation methods.

Comparable restaurant sales declined 2.6% during the quarter, while comparable retail sales fell 1.8%. However, retail sales outperformed restaurant sales for the first time in more than four years.

Traffic remained under pressure, falling approximately 6.7% during the quarter.

Chief Executive Officer Julie Masino said the company continues to focus on value for customers.

"Our value remains strong," she said.

Masino also noted that Cracker Barrel's Google Star rating increased 4% year over year to its highest level since 2018.

Chief Financial Officer Craig Pommells highlighted improving customer trends despite ongoing challenges.

"Although traffic remained negative, we're encouraged by the gradual improvements in the underlying traffic trend," he said.