Krispy Kreme — which went public in June after about five years of private ownership by JAB Holding — announced an annual guidance update in the middle of the company’s fourth quarter based on “strong momentum in the fourth quarter,” the results of which are expected to be announced in February.
Krispy Kreme is expecting 22-23% revenue growth compared to 2020, and adjusted net income growth up between 53-61% compared to 2020. For both financial estimates the company increased the bottom end of the range in response to the company’s growth during the fall and winter holidays this quarter.
CEO Mike Tattersfield said that even though the doughnut chain saw significant growth last year when most restaurant companies were challenged, Krispy Kreme’s focus on increasing points of access for customers has been a driving force for more growth as the company bought back most of its store portfolio.
“There are 300 global experiential shops in the U.S. like [the Krispy Kreme flagship in Times Square],” Tattersfield said. “We just leverage that to our 10,000 points of access, and 80% of those happen to be in grocery or convenience stores […] The uniqueness is getting fresh donuts to those points of distribution. So you get closer to the customer, instead of building out the old typical franchisor.”
As a result of this expansion model, Tattersfield said that Krispy Kreme has been able to lean more heavily into ghost kitchens that can deliver fresh doughnuts to the grocery or convenience locations so the product quality is more even throughout the doughnuts shops or wherever customers experience the Krispy Kreme brand.
Besides opening new points of access, Tattersfield said that Krispy Kreme has also been perfecting the omnichannel experience — the key to success in the post-pandemic digital era — with delivery and e-commerce comprising 17% of its business and growing.
“Think of it as a hub and spoke model,” he said. “You can get to the customer through delivery, through grocery and through our shops. […] you leverage the existing donut business, so opening up a new point of access is not capital-intensive.”
Tattersfield says he envisions Krispy Kreme as an emerging “big growth brand” even though it is 84 years old and wants to continue to expand through new avenues especially in new international markets.
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