CNBC's Jim Cramer on Thursday told investors that he's optimistic on Cracker Barrel, even though its recent earnings report disappointed Wall Street and sent shares down. He suggested the stock's decline is a buying opportunity.

"This is a true turnaround story with a great CEO, one that I think will produce terrific results going forward," he said. "And even though the quarter wasn't perfect, the turnaround — it's very much intact."

Cracker Barrel CEO Julie Masino has been orchestrating a strong turnaround for the value restaurant chain since she took the reigns about two years ago, Cramer said. He was impressed with the company's efforts to grow its loyalty program and brand development work. He highlighted Cracker Barrel's partnership with NASCAR, saying the chain has a good grasp of its core customer.

Cramer acknowledged that the quarter was technically mixed, with the stock dipping a little over 7%after it reported Thursday morning. Revenue came in weaker-than-expected, but the company managed a substantial earnings beat. He said he thinks Wall Street overreacted, in part because the stock has run up in recent months.

Cramer was satisfied with Masino's commentary on the earnings call. She admitted that the quarter "started soft," but the company took actions to "tightly manage our expenses." According to Cramer, it's a good sign that Cracker Barrel was able to adjust to circumstances and surpass its earnings projections.

Investors were not pleased with the Tennessee-based eatery's retail arm, whose same-store sales numbers were sluggish, Cramer said. Management also admitted that tariffs on Chinese imports will affect business. Cracker Barrel disclosed that roughly a third of its retail products come from China, and it also has "indirect exposure" to the duties through domestic vendors that also source from the country. While the company said it's trying to mitigate the tariff impact by "aggressively negotiating with vendors," looking for alternate sourcing and potentially increasing prices, it still expects to take a $5 million hit.

Cramer conceded that the tariff impact is not ideal, but he pointed out that the loss was baked in when the company raised its full-year EBITDA forecast.

"Frankly, I never cared much about the retail side of the business, which accounts for only 20% of the company's sales," Cramer said. "But I can't ignore it, as any company that has gotten hit by tariffs bares a sort of scarlet letter going forward."

Cracker Barrel did not immediately respond to request for comment.