MW Krispy Kreme's stock heads for a new low as company warns of weaker revenue

By James Rogers

Krispy Kreme reported fourth-quarter results before market open

Krispy Kreme Inc.'s stock was down more than 18% in premarket trading Tuesday and heading to a new low, weighed down by the doughnut maker's fourth-quarter results and weak full-year outlook.

Revenue fell 10.4% to $404 million from $450.9 million in the prior year's quarter, missing the FactSet consensus estimate of $414 million. Krispy Kreme $(DNUT)$ said that selling part of its stake in Insomnia Cookies had a $101 million impact on revenue, and the 2024 cybersecurity incident had an estimated $11 million impact.

The company revealed the cybersecurity breach in a regulatory filing in December. On Nov. 29, 2024, the company was notified regarding unauthorized activity on "a portion" of its IT systems, according to the filing. As a result, Krispy Kreme experienced online-ordering disruption in parts of the U.S.

Related: Krispy Kreme's stock falls after it says hack of IT systems is having material impact

Krispy Kreme swung to a loss of $22.4 million, or 13 cents a share, after a profit of $2.6 million, or 2 cents a share, in the prior year's quarter. The company's adjusted fourth-quarter profit of 1 cent a share missed the FactSet consensus estimate of 10 cents a share.

However, the company's organic revenue grew 5% to $1.658 billion in 2024. "We delivered an 18th consecutive quarter of year-over-year organic sales growth," Krispy Kreme Chief Executive Josh Charlesworth said in a statement. "Excluding the estimated cybersecurity incident impact, results were largely in line with our expectations," he added.

Charlesworth said that Krispy Kreme has restructured its management teams and expects to award contracts to outsource U.S. logistics soon. "Finally, we have begun a process to evaluate refranchising certain international markets," he added. "I believe these changes will drive capital efficient growth, as we continue our transformation into a bigger and better Krispy Kreme."

Related: Krispy Kreme's stock drops on earnings miss

Krispy Kreme is also continuing its push to make more fresh doughnuts available. The company said that more than 1,900 McDonald's Corp. $(MCD)$ restaurants are receiving daily deliveries of Krispy Kreme doughnuts. As a result, Krispy Kreme said that fresh doughnuts can could be purchased at 17,557 locations in 2024 - up from 3,410 the year prior.

However, Krispy Kreme gave weaker-than-expected full-year revenue and earnings guidance. For fiscal 2025, Krispy Kreme expects revenue between $1.55 billion and $1.65 billion, and adjusted earnings between 4 cents and 8 cents a share. Analysts surveyed by FactSet are looking for, on average, revenue of $1.76 billion and adjusted earnings of 30 cents a share.

Krispy Kreme shares are down 8.1% in 2025, compared with the S&P 500 index's SPX gain of 1.7%.

-James Rogers

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February 25, 2025 09:07 ET (14:07 GMT)

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