Krispy Kreme isn't 'hot now'
The donut maker's third-quarter results were decent, but guidance has investors running for the exits. The stock fell 20% Tuesday.
The market absolutely battered the donut maker after it reported third-quarter earnings late Monday. Krispy Kreme saw a scrumptious 34% jump in profit, as well as a more modest increase in revenue. So why'd the stock dive 20% Tuesday?
Put simply: Guidance and cannibalization. Krispy Kreme is lowering its earnings expectations for 2015, and the company warned stores may be stealing business from one other. Investors are spooked as a result.
There could be some profit-taking happening, too. Krispy Kreme shares had been up about 150% year to date, so investors might simply be taking money off the table.
Krispy Kreme stock experienced a roller-coaster decade after peaking in 2003, but since hitting an all-time low in 2009, the stock’s astounding climb has rewarded patient investors. Motley Fool analyst Bryan White says today's drop isn't terribly surprising, and believes international growth will be key for this company going forward.
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