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Krispy Kreme (DNUT)
NASDAQ:DNUT
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Krispy Kreme
(NASDAQ:DNUT)
52Neutral
Positive Factors
Partnerships
Partnerships with McDonald’s and Target address lack of access and support topline growth, expanding production from 5-8 hrs per day to 17-20 hrs per day.
Production Efficiency
The Doughnut Factory runs two lines producing 600 dozens per hour, more than doubling the standard configuration, and utilizes advanced technology to enhance production.
Negative Factors
Guidance
Materially worse guidance for 2025 undercuts the idea that ample demand for the brand will drive extended US growth.
Volume Growth
Volume growth is soft, and sales per hub were flat in the US despite additional doors being added.
Krispy Kreme (DNUT) vs. S&P 500 (SPY)
Market Cap
$751.02M
Dividend Yield3.17%
Average Volume (3M)4.59M
Price to Earnings (P/E)246.4
Beta (1Y)0.88
Revenue Growth-1.23%
EPS GrowthN/A
CountryUS
Employees21,000
SectorConsumer Cyclical
Sector Strength63
IndustryGrocery Stores
Share Statistics
EPS (TTM)0.01
Shares Outstanding170,300,000
10 Day Avg. Volume3,684,730
30 Day Avg. Volume4,585,051
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.56
Price to Cash Flow (P/CF)8.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.17Price Target Upside130.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Krispy Kreme Business Overview & Revenue Model
Company DescriptionKrispy Kreme, Inc., together with its subsidiaries, operates through an omni-channel business model to provide doughnut experiences and produce doughnuts. The company operates through three segments: U.S. and Canada, International, and Market Development. It also produces cookies, brownies, cookie cakes, ice cream, cookie-wiches, and cold milk, as well as doughnut mixes, other ingredients, and doughnut-making equipment. As of January 2, 2022, the company had 1,810 Krispy Kreme and Insomnia Cookies-branded shops in approximately 30 countries worldwide, which include 971 company owned and 839 franchised. It serves through doughnut shops, delivered fresh daily outlets, ecommerce, and delivery business. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is headquartered in Charlotte, North Carolina.
How the Company Makes MoneyKrispy Kreme generates revenue through several key streams: direct retail sales through its company-owned and franchise locations, wholesale distribution to grocery and convenience stores, and online sales. The company benefits from strategic partnerships with retailers and foodservice providers, which expand its market reach and enhance brand visibility. Additionally, Krispy Kreme leverages its brand equity by offering branded merchandise and leveraging licensing agreements. The company also focuses on marketing initiatives, such as its popular 'Hot Light' promotions, to drive in-store traffic and repeat purchases. Seasonal and limited-time offerings further boost sales by creating urgency and interest among consumers.
Krispy Kreme Financial Statement Overview
Summary
Krispy Kreme exhibits solid revenue generation and gross profit margins, but profitability remains inconsistent, impacted by negative EBIT and fluctuating net income. The balance sheet indicates a leveraged position with high debt levels, posing potential risks. Cash flow management is an area of concern due to negative free cash flow, despite positive operating cash flows. The company needs to address these financial challenges to ensure sustainable growth and financial stability.Income Statement
Krispy Kreme has shown a steady increase in total revenue over the years, but the latest report shows a minor decline in revenue compared to the previous year. The gross profit margin is strong, indicating efficient management of production costs. However, the company has struggled with consistent profitability, as shown by fluctuating net income and negative EBIT in the latest period.65
Positive
Balance Sheet
The balance sheet reveals a relatively high debt-to-equity ratio, suggesting a leveraged position. Although stockholders' equity has been stable, the company's total liabilities remain significant, which could pose risks. The equity ratio is moderate, indicating a balanced asset financing structure through equity.60
Neutral
Cash Flow
Cash flow analysis shows a consistent challenge in generating positive free cash flow, with recent periods reflecting negative figures. Operating cash flow has been positive, but the company has faced high capital expenditures. The free cash flow to net income ratio indicates potential cash flow challenges in supporting net income.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Mar 2023 | Mar 2022 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.67B | 1.69B | 1.53B | 1.38B | 1.12B | Gross Profit |
| 1.26B | 476.37M | 1.12B | 1.03B | 811.13M | EBIT |
| -8.73M | 13.14M | 28.98M | 41.10M | 4.28M | EBITDA |
| 213.43M | 135.24M | 141.09M | 136.94M | 78.15M | Net Income Common Stockholders |
| 3.10M | -37.92M | -8.78M | -14.84M | -60.94M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 28.96M | 38.19M | 35.37M | 38.56M | 38.51M | Total Assets |
| 3.07B | 3.24B | 3.15B | 3.15B | 3.06B | Total Debt |
| 508.34M | 1.40B | 1.24B | 1.18B | 1.59B | Net Debt |
| 479.38M | 1.36B | 1.20B | 1.14B | 1.56B | Total Liabilities |
| 1.91B | 1.98B | 1.85B | 1.81B | 2.21B | Stockholders Equity |
| 1.13B | 1.17B | 1.20B | 1.23B | 684.68M |
| Cash Flow | Free Cash Flow | |||
| -74.96M | -75.88M | 28.10M | 21.73M | -69.15M | Operating Cash Flow |
| 45.83M | 45.54M | 139.82M | 141.22M | 28.68M | Investing Cash Flow |
| 19.28M | -112.59M | -121.47M | -153.41M | -168.13M | Financing Cash Flow |
| -73.95M | 71.86M | -16.84M | 16.10M | 139.44M |
Krispy Kreme Technical Analysis
Negative
4.41
Price Trends
6.98
Negative
8.51
Negative
9.72
Negative
Market Momentum
-0.60
Negative
26.62
Positive
6.44
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNUT, the sentiment is Negative. The current price of 4.41 is below the 20-day moving average (MA) of 5.30, below the 50-day MA of 6.98, and below the 200-day MA of 9.72, indicating a bearish trend. The MACD of -0.60 indicates Negative momentum. The RSI at 26.62 is Positive, neither overbought nor oversold. The STOCH value of 6.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DNUT.
Krispy Kreme Risk Analysis
Krispy Kreme disclosed 37 risk factors in its most recent earnings report. Krispy Kreme reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Krispy Kreme Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $64.09B | 42.45 | 45.67% | ― | 14.61% | 25.68% | |
76 Outperform | $214.42B | 26.35 | -216.57% | 2.29% | 1.67% | -1.61% | |
73 Outperform | $41.26B | 28.35 | -19.43% | 1.84% | 6.68% | -7.09% | |
62 Neutral | $93.26B | 26.53 | -47.07% | 2.87% | -1.48% | -17.32% | |
59 Neutral | $11.20B | 10.09 | -1.41% | 3.96% | 1.31% | -16.95% | |
52 Neutral | $751.02M | 246.37 | 0.27% | 3.17% | -1.23% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
DNUT
Krispy Kreme
4.41
-9.73
-68.81%
CMG
Chipotle
47.29
-11.34
-19.34%
MCD
McDonald's
300.11
38.90
14.89%
SBUX
Starbucks
82.10
-2.92
-3.43%
YUM
Yum! Brands
147.83
15.21
11.47%
QSR
Restaurant Brands International
63.58
-8.25
-11.49%
Krispy Kreme Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -51.70% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements such as sustained revenue growth and expansion in global markets, with notable partnerships like McDonald's. However, these were countered by challenges including a substantial impact from a Cyber Security Incident and declining performance in key markets such as the UK. The sentiment for the call is balanced, reflecting both positive long-term growth strategies and immediate operational challenges.Highlights
Continued Organic Sales Growth
Krispy Kreme delivered its 18th consecutive quarter of organic sales growth, despite a Cyber Security Incident that impacted the quarter.
21% Revenue Growth
The company achieved a 21% revenue growth for the year 2024, driven by its expanding US delivered fresh daily network, surpassing $250 million in sales through this channel.
Global Expansion
Krispy Kreme is now operating in 40 countries, with an increase in global points of access by 24%. The company plans to expand further into Brazil and Spain in 2025.
Largest U.S. Retail Sales Day
Valentine's Day collection led to the biggest U.S. retail sales day ever for Krispy Kreme.
McDonald's Partnership
Launched daily deliveries to approximately 500 McDonald's restaurants in the Greater New York City area, with plans to reach about 6,000 restaurants by year-end.
Franchise Model Success
The international franchise model grew points of access by 8% in 2024, with successful expansions in markets such as France and South Korea.
Lowlights
Cyber Security Incident Impact
The incident affected business operations, including online ordering and materials replenishment, with an estimated revenue impact of $11 million and a $10 million EBITDA impact.
Adjusted EBITDA Decline
Adjusted EBITDA declined to $45.9 million, with a 210 basis point impact from the Cyber Security Incident.
U.S. Segment Revenue Decline
U.S. segment organic revenue declined 1.2%, with a 460 basis point impact from the Cyber Security Incident.
Challenges in UK Market
Continued pressure in the UK market affected the international segment's performance, impacting adjusted EBITDA margins.
Consumer Softness in Q1 2025
Krispy Kreme has seen consumer softness at the start of 2025, impacted by adverse weather and lingering Cyber Security effects.
Company Guidance
In the Krispy Kreme Fourth Quarter 2024 earnings call, the company provided guidance reflecting its ongoing transformation initiatives. Krispy Kreme reported a 21% increase in revenue for 2024, with U.S. delivered fresh daily sales surpassing $250 million. The company operates in 40 countries and plans to expand its U.S. presence by partnering with national chains like McDonald's and Costco, aiming to reach 23,000 global points of access by the end of 2025. The guidance for 2025 includes a projected net revenue range of $1.55 billion to $1.65 billion, organic revenue growth of 5% to 7%, and adjusted EBITDA of $180 million to $200 million. Krispy Kreme plans to optimize operations by outsourcing over 50% of its U.S. logistics by year-end and evaluating the refranchising of certain international markets. The financial outlook also considers potential impacts from foreign exchange rates and cybersecurity incidents.Krispy Kreme Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Krispy Kreme Appoints Nicola J. Steele as COO
Positive
Mar 3, 2025
On March 3, 2025, Krispy Kreme appointed Nicola J. Steele as the Chief Operating Officer. Ms. Steele has been with the company since 2006, holding various leadership roles in Australia and New Zealand. Her new compensation package includes a $400,000 annual salary, participation in the company’s bonus and long-term incentive programs, and a one-time award of restricted stock units. This appointment is part of Krispy Kreme’s strategic leadership development, potentially strengthening its operational capabilities and market positioning.
Executive/Board Changes
Krispy Kreme Announces Leadership Change and Transition Plan
Neutral
Jan 15, 2025
On November 13, 2024, Krispy Kreme, Inc. announced the resignation of Matthew Spanjers from his roles as Chief Growth Officer and President, International, effective around December 31, 2024. Although Mr. Spanjers will remain with the company until March 31, 2025, to support a smooth transition, his departure aligns with recent changes in the company’s Global Leadership Team. The transition includes a severance package and the vesting of equity awards, contingent upon certain conditions and agreements, which aim to ensure stability and continuity for Krispy Kreme during this leadership change.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.