Krispy Kreme gets crushed after earnings

Lackluster quarterly revenue and a profit miss send the stock down by 14%.

By InvestorPlace Jun 3, 2014 12:33PM

Doughnuts are boxed at the Krispy Kreme store on April 15, 2004 in New York City (© Chris Hondros/Getty Images)By Burke Speaker


Krispy Kreme (KKD) stock suffered a significant drop Tuesday after the company reported lower-than-expected quarterly profits and revenue, forcing executives to lower their full-year guidance.


Krispy Kreme reported $121.6 million in first-quarter revenue, up 0.8 percent year over year but shy of analyst expectations of $126.5 million. 


On an unadjusted basis, net income was $9.7 million (14 cents per share), up from $8 million from a year earlier. Adjusted earnings were up 12 percent to $15.8 million, or 23 cents per share, which was 1 cent below the Street consensus.

That had the stock sliding more than 14 percent by midday Tuesday.

Krispy Kreme chairman James Morgan blamed a tough winter for the results.


"Severe winter weather adversely affected both on-premises and wholesale sales throughout our company store base in the Southeast, and contributed to a 1.5 percent decline in same-store sales at company shops against a very tough 12.2 percent same-store sales gain in the first quarter last year," Morgan said. "Our domestic franchisees, however, who were less affected by weather, posted a gain in same store sales of 4.5 percent on top of an 11.8 percent rise in the first quarter last year."


The biggest worry moving forward, however, is not the cool sales, but the company's outlook for the year.


Krispy Kreme lowered its earnings outlook for the full year to a range of $48 million to $51 million from $51 million to $55 million, blaming several factors including compensation, new technology and an "unfavorable variance to expected results in the first quarter.


KKD shares are down 14 percent this year.


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Tags: KKD
97Comments
Jun 3, 2014 1:49PM
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the excuse for these drops is always the weather...i think drop in discretionary income is what's to blame...esp. with super increases in health insurance,food,and utilities imminent...people are becoming very cautious to see what's next
Jun 3, 2014 1:39PM
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Everything that taste good always end up being bad for you.   
Jun 3, 2014 3:41PM
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What an idiot of a CEO...cold weather would seem to make ppl drink MORE COFFEE!!!....not less.  Maybe he can blame the cost of toilet paper or water or traffic?
Jun 3, 2014 3:31PM
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their profits rose 12% in a year - and that's a failure??? This is the problem with publicly traded stocks; no one really pays attention to the real message, which is people are still buying donuts!
Jun 3, 2014 2:05PM
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I will not pay $7.00 for these donuts, even if  half the money goes to a school or church. This is their downfall. While many schools and churches have throughout the years in the South used Krispy Kreme as a fund raiser, their prices continue to go up. Who can earn funds by selling something that last week was @2.50 and the today is $7.00?

Now you see why man people have turned from selling donuts for a fundraiser. Also, why buy as a fundraiser when Wal Mart carries the same item for less?

Jun 3, 2014 2:35PM
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Well, since they finally realize they can't blame Bush for everything, It must be the weather!

Yep, It's global warming's fault!

Jun 3, 2014 2:00PM
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Maybe the cops are getting wise and now getting their donuts from Wally World now because they are cheaper than KK. 
Jun 3, 2014 3:05PM
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After reading about half the comments, I had to go out and get another piece of Cake that I had just baked and the wife frosted...


Hell I got two pieces, don't want to waddle out there twice...Burns too many calories, and that will just make me hungry ;)

Jun 3, 2014 2:42PM
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Looks like I need to swing by KK and place an order - gotta keep this from happening again!
Jun 3, 2014 1:28PM
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Their stock went down because it didn't meet some analysts projection? And their projection was based on what? That obama would be impeached before the numbers came in?
Jun 3, 2014 1:27PM
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Krispy Kreme donuts have always been a favorite treat of mine outside of ice cream, at one time. However, they are are bad, bad, bad for your health. Too much sugar, as we all know, contributes to the rise in diabetes and obesity here. If they could find a sweet alternative for sugar, without all the added calories and without compromising taste, then they would have a booming market again.
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Krispy Cream's problem is Dunkin Donuts, and as long as Dunkin D is around, Krispy Cream will always be a distant second.  
Jun 3, 2014 2:10PM
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Krispy Kreme has a good glazed doughnut,the rest not so good.I prefer Dunkin Donuts.
Jun 3, 2014 4:57PM
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Krispy Kream donuts are not for me. There are better ones from small local donut shops.
Jun 3, 2014 4:11PM
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Another signal that the US has NO economy thanks to Bozo and friends.

 

If you want to be able to afford a doughnut vote out lying Democrats in November!!!

Jun 3, 2014 1:44PM
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This summer we can still look forward to some Krispy Kreme 5Ks to add to the revenue.  After that it is fair season and  hopefully the sales of Krispy Kreme Cheese Burgers will make up for the bad winter. 
Jun 3, 2014 5:41PM
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Krispy Kreme donuts are not that good and they are over priced. I live in a city of about 108,000 people and we had a Krispy Kreme open up here and everyone seemed to like the idea but after tasting their donuts people said they weren't even as good as our local bakeries. So I guess most customers were one timers and done they didn't even last a year.
Jun 7, 2014 11:16AM
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Krispy Kreme doughnuts can't hold a candle to local bakeries.  Cold Krispy Kreme doughnuts are terrible, worst than Twinkies.


I don't buy them fresh, or cold. Sorry.

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