Krispy Kreme surges on earnings beat, turnaround progress

Investing.com -- Krispy Kreme, Inc. (NASDAQ: DNUT) shares surged premarket on Thursday following the company's latest quarterly results.

DNUT reported fourth quarter adjusted earnings per share of $0.09, beating analyst estimates of $0.03 by $0.06, while revenue of $392.4 million topped the consensus estimate of $389.47 million. The stock jumped 17.1% following the results as investors responded positively to the earnings beat and progress on the company's turnaround plan.

Revenue declined 2.9% from $404.0 million in the prior year quarter, primarily due to the strategic closure of underperforming locations. Organic revenue decreased 3.9%, reflecting a 13.5% reduction in Global Points of Access to 15,194. Despite the revenue decline, the company expanded adjusted EBITDA margin by 280 basis points YoY to 14.2%, with adjusted EBITDA rising 21.0% to $55.6 million.

"During the fourth quarter, we demonstrated meaningful progress on our turnaround, unlocking strong consumer demand for Krispy Kreme's iconic, fresh doughnuts through our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth," said CEO Josh Charlesworth.

The company reported a GAAP net loss of $29.1 million, or -$0.17 per share, compared to a net loss of $22.2 million, or -$0.13 per share, in the prior year quarter. The improved adjusted EBITDA margin was driven by productivity initiatives, SG&A savings, removal of costs from the ended McDonald's USA partnership, and $4.8 million in business interruption insurance recoveries related to a 2024 cybersecurity incident.

For fiscal 2026, Krispy Kreme expects systemwide sales to grow 2% to 4% in constant currency from $1.96 billion in 2025. The company plans to open at least 100 shops globally and targets capital expenditures of $50 million to $60 million, positive free cash flow, and a net leverage ratio at or below 5.5x.

The company announced a refranchising agreement for its Japan operations, expected to close in the first quarter of 2026 with cash proceeds of approximately $65 million. Krispy Kreme also plans to restructure its Western U.S. joint venture with WKS Restaurant Group.

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