Let’s talk about the biggest controversy taking the Internet by storm. I'm referring to Cracker Barrel.
Social media's calling it Bud Light 2.0. Even the folks at Shake ‘n' Bake and DUDE Wipes are online trolling its "makeover."
And since this rebranding gone wrong, Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) has lost over $200 million in market value.
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Backlash Behind The Branding
Last week, Cracker Barrel unveiled a $700 million branding overhaul — ditching its iconic Old Man logo and the "Old Country Store" tagline for a sleeker, more modern vibe. They’re also revamping their merchandise and updating their store interiors.
The problem? Real-world responses don't exactly mirror the company's focus groups.
Cracker Barrel's CEO called the initial reaction "overwhelmingly positive," but on social media, the tone couldn't have been more different.
Over half a million X posts labeled the rebrand "woke," comparing it to the Bud Light backlash — with boycott calls, memes, and even resignation demands aimed at leadership.
Investors didn't take it lightly either: the stock plunged over 15% within a week, closing near $54 and shedding up to $200 million in market cap.
But here's the bigger problem.
The brand isn't just fighting online trolls — it's battling real, structural challenges:
- Revenues are barely up 1% year-over-year.
- Net income is down 58%.
- And analysts rate it a "Hold" — with little upside from today's price.
Even before this rebrand, Cracker Barrel had already been losing ground in the casual dining sector.
Customer traffic has been declining for years. Food and labor costs are rising. And fast-casual competitors are eating their lunch.
The long-term stock chart shows a steep drop from its 5-year high of $175 now its current trading price of around $54.
How Cracker Barrel Stacks Up
Let's compare Cracker Barrel's post-COVID performance to its industry peers:
- Cheesecake Factory (NASDAQ:CAKE): Up 348% since its 2020 lows
- Darden Restaurants (NYSE:DRI): Up 702%
- Texas Roadhouse (NASDAQ:TXRH): Up 69%
- Brinker International (NYSE:EAT): Up over 2,000%
Cracker Barrel? Just 3% up since the lows. Even this year alone, it's barely budged, up only about 4.5%, while Brinker is up 111%.
So, whether you're comparing it to restaurant peers or even Anheuser-Busch, which weathered its own brand disaster with a strong recovery, Cracker Barrel is falling behind.
But, is it a buy or a bail?
If you think Cracker Barrel could recover, but you're cautious about buying in at current prices, there's another way to trade it: consider selling put options.
This strategy allows you to get paid upfront to potentially buy the stock cheaper later on, if it drops.
Let's say the stock is trading at $54. You could sell a 90-day put at the $40 strike for $2. That's $200 cash in your account (per contract).
- If the stock stays above $40, you keep the premium free and clear.
- If the stock drops below $40, you're obligated to buy at that price, but your effective cost is just $38.
You're either making income or owning the stock at a steep discount.
Whether Cracker Barrel rebounds from this rebranding flop or spirals further remains to be seen.
But what's clear is that selling puts allows you to stay on the sidelines and potentially profit either way.
Just make sure it's a stock you actually want to own. And always do your own research.
Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.
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