QS Research · Michael Burry's Scion Capital analyst template · 2006
CRACKER BARREL OLD COUNTRY STORE, INC (CBRL)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case none · downside -24% · upside +22%
At $64.81 the $1.45B market cap is a 6.1% yield on FY2026 FCF of $88.4M, so my base case is $64.81/share (0%). An 8% required FCF yield gives $88.4M/0.08 = $1.105B, or $49.4/share (-24%); a 5% yield gives $88.4M/0.05 = $1.768B, or $79.1/share (+22%), so the reward does not cover the risk. FY2027 guidance of $180M-$200M adjusted EBITDA and the debt cut to $337.2M are real dated catalysts, but FY2026 operating income was -$12.5M and Q3 comparable restaurant traffic was -6.7%, so I need delivery rather than belief. Pass: no long or short edge at this price, even though the 24.6% short interest keeps it on the watch list.
Key numbers
- Share price: $64.81
- Market cap: $1.45B
- Latest financial period: FY Jul 2026 to Jul 31, 2026
- Revenue (FY Jul 2026): $3.32B
- EV / EBITDA (FY Jul 2026): 17.2x
- P/E (FY Jul 2026): 45.7x
- Price / book: 3.03x
The 15 boxes
- ✓ 1. Long-form business notes
CBRL runs one core concept: 655 non-franchised Cracker Barrel stores in 43 states as of Sep 11 2026, with restaurants at ~81% of 2026 total revenue and gift shops occupying ~20% of store space; FY2026 average check was $15.58 (+3.7%) and ~20% of restaurant sales were off-premise. Across FY2021-FY2026 revenue grew from $2.82B to $3.32B, but operating income fell from $366.7M to -$12.5M and net income from $254.5M to $31.7M. The oldest-to-newest 10-K comparison shows fewer stores (664 to 655), fewer states (45 to 43), higher restaurant mix (79% to 81%), higher average check ($11.40 to $15.58), lower weekly guests (5,500 to 4,900), and the MSBC exit in Q4 2026.
- ✓ 2. Competitive advantage
Management claims a real brand moat — a 'unique brand and guest experience' combining a full-service menu with nostalgic retail — but the six-year record shows no durable economic advantage: operating income went from $366.7M in FY2021 to -$12.5M in FY2026 while revenue rose from $2.82B to $3.32B. Competition is described as intense, including national chains with greater marketing and financial resources, and the company concedes a moderately priced menu limits its ability to pass through cost increases. The genuine structural edges are modest and balance-sheet-based: cash/credit-card sales that let it run negative working capital, and FY2026 operating cash flow of $206.2M against capex of $117.8M.
- ✓ 3. 10-Q takeaways
The Q3 FY2026 10-Q (quarter ended May 1, 2026; filed June 9, 2026) shows revenue down 2.9% to $797.4M, with comp restaurant sales -2.6% and traffic -6.7%. Q3 operating income was $6.7M, while GAAP net income of $42.8M was boosted by a $47.4M interchange-litigation settlement; adjusted net income was $6.5M. The first nine months FY2026 produced an operating loss of $(25.6)M. Management raised FY2026 revenue and adjusted EBITDA guidance, the 10-Q reports no material risk-factor changes, and no shares were repurchased.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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