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.

By Motley Fool Investor Beat Dec 3, 2013 6:22PM
Hold on to your hats, Krispy Kreme (KKD) investors. Today’s forecast calls for rough seas and serious headwinds.

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

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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Tags: KKD
8Comments
Dec 3, 2013 7:25PM
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Just dropping the stock price so the company can buy it back on the cheap.
Dec 3, 2013 7:34PM
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The first Krispy Kreme was established on the south bound lanes on route 1 in Alexandria VA. They placed it there knowing families returning home from vacation would not have the money to stop and purchase sweet treats.
Dec 3, 2013 7:24PM
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Nothing better than KK when they are piping hot. Yum. But once they cool off, yuck!.
Dec 4, 2013 10:33AM
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Oh boy the donut house is hurting.  What is one to do next?
Dec 3, 2013 7:33PM
Dec 3, 2013 6:42PM
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I don't get the attraction to KK doughnuts. Under cooked, (like cinnamon bons), overly sweet, over priced. Pure crap to my taste buds. Oh well, to each his own.
Dec 3, 2013 7:01PM
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I'll bet that horse in the Whitehouse can sure eat alot of them off that POTUS's JFK.
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