WINSTON-SALEM N.C. Krispy Kreme Doughnuts Inc. posted net income of $4 million for the first quarter ended May 4 as the chain continued to shift its operations overseas. The profit of 6 cents per share compares with a loss of $7.4 million, or 12 cents a share, for the year-ago quarter, when the doughnut company took a charge of $9.6 million for debt refinancing.
Revenues for the quarter were $103.6 million, a decline of 6.6 percent from the comparable quarter of the prior fiscal year. Same-store sales slipped 3.9 percent systemwide, but rose 1.2 percent at company units, according to the company, which franchises or operates 470 Krispy Kreme doughnut shops.
The chain ended the quarter with 27 more international stores and six fewer domestic units. Half of the system now operates outside of the United States, the franchisor said. About three out of four stores systemwide are franchised, it noted.
In announcing the financial results, Krispy Kreme warned that franchisees will likely close additional outlets in the future, and that the number could be “significant.”
First-quarter results were aided by a $930,000 gain from the sale of the franchisor’s interests in two franchisees. As part of that transaction, the company was also released from certain lease guarantees and benefitted from a $645,000 net credit for lease-related responsibilities.
“We are pleased to report improved bottom line results in the first quarter of fiscal 2009 compared to the first quarter of last year,” Jim Morgan, chairman, president and chief executive, said in a statement. “Much work remains to be done to achieve the consistent profitability and sustainable growth we envision.”