Krispy Kreme reports 10.4% revenue declines following cybersecurity attackKrispy Kreme reports 10.4% revenue declines following cybersecurity attack

Krispy Kreme reported a 10.4% decline in revenue growth for the fourth quarter ended Dec. 29, with adverse impacts from the company’s partial sale of Insomnia Cookies and a cybersecurity attack that caused delivery services to be offline for more than a month.

Despite these challenges, CEO Josh Charlesworth said during Tuesday’s earnings call that the company’s DFD (“Delivered Fresh Daily” network) is growing, with the channel reporting 21% revenue growth and surpassing $250 million in sales for the first time this past quarter.

One of Krispy Kreme’s most rapidly growing partnerships is with McDonald’s. In the New York City area, Krispy Kreme is now sold at 500 McDonald’s locations, with a goal of reaching 6,000 stores by the end of 2025 and in 12,000 McDonald’s locations by the close of 2026.

Krispy Kreme is also growing rapidly in international markets, with operations currently in 40 markets globally.

Even with these net positives for the quarter, the JAB Holding-owned doughnut company is in the middle of a transitionary period as it pivots focus toward developing distribution partnerships and adding new ones, like Costco.

“We simplified the business by divesting a majority stake in Insomnia Cookies,” Charlesworth said. “We added national distribution partners in the U.S. and we restructured our management teams to fully focus on our largest growth opportunities: profitable U.S. delivered fresh daily expansion and the wider adoption of our capital-light international franchise model.”

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The company also plans to double down on value alongside its rotating limited-time offer calendar of seasonal and promotional doughnuts, as the company acknowledges the challenging consumer environment.

“Original Glazed doughnuts will get the spotlight as we evolve our marketing efforts toward simplified pricing and focus on value conscious consumers, who we know are under pressure,” Charlesworth said. “Although we will offer fewer days overall on discount, we will use meaningful discounts to drive demand on days like National Donut Day that we can turn into buzz-worthy events.”

For the fourth quarter ended Dec. 29, Krispy Kreme reported net revenue of $404 million, down from $450.9 million the same quarter the year prior. Krispy Kreme's net loss was $22.2 million, or 13 cents a share, compared to a profit of $1.9 million, or two cents a share, in the same quarter last year.  

The company estimates that selling most of its stake in Insomnia Cookies had a $101 million impact on revenue, whereas the November 2024 cybersecurity issue had an approximate $11 million impact on revenue.

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Contact Joanna at [email protected]