WINSTON-SALEM N.C. Krispy Kreme International Inc. nearly broke even in its latest quarter, helped by lower commodity costs, the closure of underperforming stores and a same-store sales increase at corporate locations.
The operator or franchisor of 548 Krispy Kreme locations, 326 of which are located in international markets, said that in the future it would continue to open stores with a smaller footprint as well as additional overseas locations. The company also said it would focus on menu items that would grow traffic across dayparts, such as its Kool Kreme soft-serve ice cream product.
Ten Krispy Kreme locations now are testing the Kool Kreme product, the company said.
“We continue to believe that Kool Kreme has the potential to provide significant operational leverage by addressing both dayparts and seasonal-parts challenges,” the company’s chief executive, James Morgan, said. Krispy Kreme has typically posted its worst performances during its fiscal second quarter, which includes summer months.
For the second quarter ended Aug. 2, Krispy Kreme posted a net loss of $157,000, or nil cents per share, compared with a loss of $1.9 million, or 3 cents per share, in the same quarter a year earlier.
Latest-quarter revenue fell 12.2 percent to $82.7 million. Krispy Kreme closed nine locations during the quarter. Same-store sales at corporate stores rose 5.9 percent, versus a decline of 4.1 percent last year.
Krispy Kreme said lower prices for doughnut mix and shortening, driven by lower agricultural commodity costs, made up a large portion of its operating income gain, which totaled $2.9 million in the latest quarter, versus an operating loss of $1.0 million in the second quarter last year.
Contact Sarah Lockyer at [email protected].