WINSTON-SALEM N.C. Krispy Kreme Doughnuts Inc. reported a 54-percent decline in first-quarter profit as revenue fell 10 percent and lease termination costs and charges from credit facility changes hurt the parent company to the struggling doughnut chain.
For the quarter ended May 3, Krispy Kreme earned $1.9 million, or 3 cents per share, compared with $4.0 million, or 6 cents per share, in the same quarter a year ago. The company booked $2.4 million in lease termination charges and another $1.1 million of charges related to amendments for its secured credit facilities.
Krispy Kreme’s operating income, which includes the lease termination costs but excludes taxes or interest expenses, rose to $5.8 million in the first quarter versus $5.6 million in the same quarter last year.
Quarterly revenues totaled $93.4 million, down from $103.6 million a year ago. Same-store sales at corporate locations increased 2.1 percent. There are 536 Krispy Kremes, including 221 in the United States and 315 in foreign markets.
Krispy Kreme has been struggling for years after its sales spiraled downward starting in 2004, the same year that allegations of corporate misconduct arose. It has since closed hundreds of stores, reduced its retail footprint and changed the management team. The company’s latest fiscal year, which ended Feb. 1, was the first time it logged an annual operating profit since 2004.
The company said Thursday it would focus summer marketing efforts on its Kool Kreme soft serve ice cream, which also boasts a fresh fruit bar, along with mini doughnuts and iced beverages.
The chain also will begin this fall a test of its first baked goods menu, including bagels, muffins, cinnamon and pecan rolls and Danish pastries.
Contact Sarah E. Lockyer at [email protected].