Cracker Barrel lost nearly $100 million in market value this week when it rolled out a new logo removing its longtime mascot, which generated an outcry from investors and customers.
Stock of the restaurant chain fell 7.2% on Thursday, plummeting $4.22 to $54.80 by close. The stock hit a low that day of $50.27, erasing almost $200 million in value before rebounding somewhat. The fall left Cracker Barrel with a loss in market capitalization of $94 million.
On Friday, the stock flashed temporary signs of recovery but fell again, at $54.40, down another 40 cents. The sharp volatility indicates concern over the company’s rebranding strategy, which is being implemented under CEO Julie Felss Masino.
The new logo is rid of the photo of an overall-clad guy resting against a barrel – familiar to fans as “Uncle Herschel” – and instead employs a stripped-down design centered on the firm’s wordmark and barrel form. Cracker Barrel was insistent in a statement that Uncle Herschel would still be present as part of the brand within its restaurants and menus, adding that its “values haven’t changed.”
Nevertheless, the redesign has provoked intense responses. Brand marketing professionals complimented the fresh face, but conservatives and others excoriated the revised look as “generic” and even called it “woke.” Brand strategist Kelly O’Keefe contended that under ordinary circumstances, the change would not draw so much attention but indicated that the political climate has made even small marketing choices hot-button issues.
Others intimated the company took a grave error in turning away from its retro identity. “The holy grail of marketing is to build a brand customers own. Cracker Barrel had that – and you never let it go,” said Kevin Dahlstrom, Bolt Health founder, on social media, describing the redesign as a “fiasco.”
Cracker Barrel, established in 1969, now has close to 660 stores in the U.S. The chain was previously one of the nation’s most rapidly growing restaurants but experienced slowing growth in recent years. The company reported $3.5 billion in revenue for fiscal 2024, a modest increase from the previous year, while net income fell to $40.9 million from $99 million in 2023.
Cracker Barrel shares are still up 7% this year, trading at about $55, but are well below their high in 2018 of more than $180. With its rebranding initiative already in progress, the company has the task of updating its image without losing committed customers or further spooking shareholders.
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