Multinational doughnut and coffee chain Krispy Kreme saw its shares plummet after reporting second-quarter results.
The company’s adjusted earnings per share of $0.07 matched estimates. However, total revenue of $408.9 million (+9% YoY) came in just shy of consensus expectations. In terms of segments, U.S. revenue grew 9.3%, international rose 4.8%, and e-commerce jumped 18% YoY. 🔺
Higher prices, marketing spending, and an expansion of its Delivered Fresh Daily (DFD) strategy drove U.S. growth. As it expanded beyond its chains and into grocery stores and other venues, doughnut freshness (or lack thereof) impacted the brand’s reputation with consumers. Earlier this year, it decided to deliver all its doughnuts fresh daily to maintain quality and charge the same price as in its own stores. 🍩
Executives say they’re continuing to focus on that omnichannel approach. They’re also expanding the brand’s presence further, particularly internationally, adding three to five more markets by year-end. However, they reaffirmed previous guidance for full-year 2023, disappointing investors who were looking for a sweeter outlook.
The revenue miss and neutral guidance was enough reason for investors to sell. $DNUT shares fell 14% back towards the middle of their one-year trading range as investors await a stronger growth catalyst for Krispy Kreme’s business. 👎
