Cracker Barrel Old Country Store (NASDAQ:CBRL) reported third-quarter fiscal 2025 results that surpassed expectations, buoyed by improving traffic trends, effective cost management, and a strong start to Q4. The company recorded total revenue of $821.1 million, with comparable restaurant sales up 1% and adjusted EBITDA of $48.1 million. Restaurant revenues grew 1.2% year-over-year, even as retail sales dipped 2.7%. Labor efficiencies and selective pricing contributed to stronger margins, prompting Cracker Barrel to raise full-year EBITDA guidance to $215–$225 million.

In addition to its financial performance, Cracker Barrel highlighted several technology initiatives as part of its multi-year transformation plan.

The company is leveraging artificial intelligence (AI) and machine learning across guest personalization, labor forecasting, customer service, and cybersecurity. CEO Julie Masino underscored the role of these efforts in elevating guest engagement and operational efficiency. The company also expanded its digital loyalty program, integrated AI-driven personalization into rewards offers, and optimized back-of-house operations to improve both employee experience and food consistency.

Why It Matters: Cracker Barrel’s increased focus on AI and digital strategy marks a critical shift for a brand traditionally rooted in analog experiences. As the company modernizes operations while preserving its identity, it provides a notable case study for CIOs and digital leaders overseeing technology transformations in legacy businesses. By embedding AI in loyalty platforms, labor models, and guest services, Cracker Barrel is positioning itself to be more agile and data-informed, with technology acting as both a competitive differentiator and operational enabler.

• AI-Powered Personalization Enhances Guest Loyalty and Revenue: Cracker Barrel’s investment in customer data science is paying dividends through its Cracker Barrel Rewards program, which surpassed its fiscal 2025 target of 8 million members. Notably, over one-third of tracked sales are now linked to loyalty members, demonstrating the program’s scale and traction. The company has begun testing advanced personalization capabilities using an AI-driven learning model, which delivers differentiated offers to members based on behavior and preferences. CEO Julie Masino shared that this initiative drove “a mid-single digit lift in average revenue per member compared to control,” pointing to tangible gains in both guest engagement and monetization.

• Tech-Enabled Kitchen Redesign Improves Labor Productivity and Food Quality: Cracker Barrel’s back-of-house optimization initiative, launched systemwide in Q3, is part of a multi-phase effort to modernize kitchen operations through technology and process innovation. In Phase One, the company simplified workflows and leveraged digital tools to enhance consistency and reduce preparation complexity, leading to meaningful improvements in labor efficiency and employee satisfaction. “Employee feedback has been very positive as team members find the new processes easier to execute,” said CEO Julie Masino, highlighting usability as a key success factor. Future phases will integrate pre-prepped ingredients and evaluate smart kitchen equipment, signaling a longer-term move toward tech-assisted cooking and automation in the restaurant environment.

• AI and Machine Learning Deployed Across Key Business Functions: Beyond guest personalization, Cracker Barrel is applying AI and machine learning across multiple operational domains. Store-level traffic forecasting has been enhanced by machine learning models, improving labor scheduling precision and cost control. An AI-powered guest relations triage system now expedites resolution times by routing customer issues more intelligently, freeing up human agents for high-touch interactions. The company is also leveraging machine learning in its cybersecurity efforts, underscoring a shift toward proactive, technology-first risk management.

• Digital Marketing and Brand Refresh Bolster Tech-Infused Guest Engagement: Cracker Barrel’s brand refinement initiative is taking shape with a digitally integrated marketing campaign, a refreshed look and feel, and greater emphasis on social engagement. The campaign is anchored around the reintroduction of its nostalgic Campfire Meals, promoted through loyalty exclusives and early access perks for digital members. The brand also partnered with creators to boost reach on social platforms and aligned with NASCAR’s Cracker Barrel 400 to connect with core audiences in more experiential ways. These moves reflect a sophisticated blend of analog charm and modern digital strategy designed to elevate brand relevance.

• Retail Tech Strategy Adjusts for Tariffs and Optimizes Inventory Management: With roughly one-third of its retail merchandise sourced directly from China, Cracker Barrel faces tariff-related cost pressures that could materially impact margins. In response, the company has activated a three-pronged mitigation strategy: aggressive vendor negotiations, alternate sourcing, and selective pricing. Additionally, the brand is using this moment to fast-track retail modernization, including SKU rationalization, theme simplification, and timing adjustments based on predictive consumer demand. These efforts are supported by enhanced retail planning tools and supply chain visibility systems, enabling faster adaptation in a dynamic regulatory and sourcing environment.

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