WINSTON-SALEM N.C. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
After posting this month its first quarterly profit in more than a year, Krispy Kreme’s latest chief executive said the chain expects to begin building new corporate locations this year after a long hiatus from development. The company also plans to refranchise existing corporate locations, continue development abroad—where nearly half of the 470-unit chain is now located—and test three varieties of new packaged snack products to help revamp its once-thriving wholesale operation. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
While CEO James Morgan, who took the post in January, said the initiatives wouldn’t gain “meaningful traction” for another 12 to 24 months, he said that over time Krispy Kreme would face “many more opportunities than…challenges.” —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
(To view charts featured in this week's print pages, click here.) —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
The packaged snack products in test in North Carolina include mini snack packs of individually packaged versions of the brand’s crullers, doughnut holes and Krispy Juniors. The goal, management said, is to introduce products with a longer shelf life, which would help increase off-premise profitability that typically had relied on fresh-delivered doughnuts from Krispy Kreme restaurants. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
Others in the snack sector also have looked to retail sales to boost corporate profits. Starbucks is selling chocolates and coffees in grocery stores, and Dunkin’ Donuts has introduced its packaged coffees to the grocery channel as well. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
Krispy Kreme officials did not mention, however, possible forays into coffee or beverage programs or other such menu items as baked goods, fruit cups or yogurt, which already have been introduced at many quick-service chains. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
“Krispy Kreme products are by and large an indulgence, and we quite frankly do not intend to shy away from that reality,” Morgan said. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
During its latest quarter, Krispy Kreme also was able to pay down debt, book a gain on the sale of equity in certain franchisees and amend its credit arrangements—at high rates but with flexible terms, one analyst noted. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
The company posted a profit of $4 million, or 6 cents per share, for the first quarter ended May 4, versus a loss of $7.4 million, or 12 cents per share, a year earlier, which included a $9.6 million charge for debt refinancing. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
Revenue for the latest quarter totaled $103.6 million, a decline of 6.6 percent from a year ago. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
The news sent the company’s stock soaring 32 percent for the week to close at $4.52 per share. Securities analyst John Ivankoe at J.P. Morgan, one of the few analysts who continues to cover Krispy Kreme, said that with the company’s credit resolution and return to profitability, the stock “may have bottomed…as near-term liquidity risk seems behind it and U.S. weakness will likely be offset by strength abroad.” —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
Metrics at domestic Krispy Kreme units continued to suffer, despite the company’s brightened financial picture. Same-store sales for the first quarter ended May 4 fell 3.9 percent systemwide, the company said. Same-store sales at Krispy Kreme’s 100 corporate locations rose 1.2 percent, the company said. Corporate units contribute the lion’s share of corporate revenue. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
Domestic franchisees still aren’t faring well, the company noted, and a “significant number” may still close outlets in the future. Management declined to elaborate on that comment during a conference call with investors, but the company noted most franchisees have closed the “obvious losers.” —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.
For the company’s latest full year, which ended in January, domestic franchised unit counts fell 12 percent from the year earlier, to 145 locations. In Krispy Kreme’s heyday—before federal investigators began looking into the company’s accounting practices, shareholders filed lawsuits and executives were ousted—it had more than 300 domestic locations and franchisees had opened more than 200 of those units. —The sleeping giant of the snack sector, Krispy Kreme Doughnuts, may be waking up from what critics have called a self-inflicted sugar coma spurred on by hyperactive unit growth and alleged corporate shenanigans.