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Krispy Kreme 1Q profit rises 21.3%Krispy Kreme 1Q profit rises 21.3%

Severe winter weather, difficult comparisons dampened same-store sales

Bret Thorn, Senior Food Editor

June 3, 2014

2 Min Read
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Krispy Kreme Doughnuts Inc. saw a 21.3-percent increase in net income for the first quarter ended May 4.

Despite that healthy gain, the Winston-Salem, N.C.-based doughnut chain lowered its earnings-per-share guidance for the fiscal year to between 68 cents and 74 cents, a decrease from 73 cents to 79 cents. Krispy Kreme’s cautious guidance is due to higher expenses related to investment in a new enterprise resource planning system and costs related to its executive management succession.

“Taking all these factors into account, we felt it was prudent to revise our expectations for the balance of the year,” executive chairman James H. Morgan said in a prepared statement.

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Morgan served as the company’s president and chief executive until June 1, when he was succeeded by Anthony N. Thompson.

Severe weather in the quarter also affected sales, especially at company-owned units in the Southeast, which saw a 1.5 percent decline in same-store sales. Overall, same-store sales rose 2.3 percent.

Corporate same-store sales results also suffered from a comparison to sales in the previous year’s quarter, which rose 12 percent.

Revenue increased 0.8 percent to $121.6 million, from $120.6 million in the first quarter last year, dampened by refranchising locations.

Krispy Kreme refranchised six locations in the previous fiscal year and currently operates 97 units.

Despite the lowered guidance, Roth Capital Partners indicated Krispy Kreme’s stock is a buy.

“We believe that KKD’s outlook is one of the most attractive in the restaurant industry,” Roth said. “We look for accelerated domestic and international expansion, while company-operated restaurant margins should continue to expand. The appointment of a new CEO signals the completion of the turnaround process and a transition to a growth and expansion mode.”
 

1Q NET INCOME

Result: $9.7 million
% Increase: 21.3% (from $8 million)

1Q REVENUE

Result: $121.6 million
% Increase: 0.8% (from $120.6 million)

1Q SAME-STORE SALES

% Increase systemwide: 2.3%

Source: Company report



Contact Bret Thorn at [email protected].
Follow him on Twitter: @foodwriterdiary

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About the Author

Bret Thorn

Senior Food Editor, Nation's Restaurant News

Senior Food & Beverage Editor

Bret Thorn is senior food & beverage editor for Nation’s Restaurant News and Restaurant Hospitality for Informa’s Restaurants and Food Group, with responsibility for spotting and reporting on food and beverage trends across the country for both publications as well as guiding overall F&B coverage. 

He is the host of a podcast, In the Kitchen with Bret Thorn, which features interviews with chefs, food & beverage authorities and other experts in foodservice operations.

From 2005 to 2008 he also wrote the Kitchen Dish column for The New York Sun, covering restaurant openings and chefs’ career moves in New York City.

He joined Nation’s Restaurant News in 1999 after spending about five years in Thailand, where he wrote articles about business, banking and finance as well as restaurant reviews and food columns for Manager magazine and Asia Times newspaper. He joined Restaurant Hospitality’s staff in 2016 while retaining his position at NRN. 

A magna cum laude graduate of Tufts University in Medford, Mass., with a bachelor’s degree in history, and a member of Phi Beta Kappa, Thorn also studied traditional French cooking at Le Cordon Bleu Ecole de Cuisine in Paris. He spent his junior year of college in China, studying Chinese language, history and culture for a semester each at Nanjing University and Beijing University. While in Beijing, he also worked for ABC News during the protests and ultimate crackdown in and around Tiananmen Square in 1989.

Thorn’s monthly column in Nation’s Restaurant News won the 2006 Jesse H. Neal National Business Journalism Award for best staff-written editorial or opinion column.

He served as president of the International Foodservice Editorial Council, or IFEC, in 2005.

Thorn wrote the entry on comfort food in the Oxford Encyclopedia of Food and Drink in America, 2nd edition, published in 2012. He also wrote a history of plated desserts for the Oxford Companion to Sugar and Sweets, published in 2015.

He was inducted into the Disciples d’Escoffier in 2014.

A Colorado native originally from Denver, Thorn lives in Brooklyn, N.Y.

Bret Thorn’s areas of expertise include food and beverage trends in restaurants, French cuisine, the cuisines of Asia in general and Thailand in particular, restaurant operations and service trends. 

Bret Thorn’s Experience: 

Nation’s Restaurant News, food & beverage editor, 1999-Present
New York Sun, columnist, 2005-2008 
Asia Times, sub editor, 1995-1997
Manager magazine, senior editor and restaurant critic, 1992-1997
ABC News, runner, May-July, 1989

Education:
Tufts University, BA in history, 1990
Peking University, studied Chinese language, spring, 1989
Nanjing University, studied Chinese language and culture, fall, 1988 
Le Cordon Bleu Ecole de Cuisine, Cértificat Elémentaire, 1986

Email: [email protected]

Social Media:
LinkedIn: https://www.linkedin.com/in/bret-thorn-468b663/
Facebook: https://www.facebook.com/bret.thorn.52
Twitter: @foodwriterdiary
Instagram: @foodwriterdiary

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