Why Doughnut Maker Krispy Kreme Shares Are Falling Today

Krispy Kreme shares dip premarket as Q4 earnings miss analyst estimates despite solid sales growth; outlook disappoints.

Krispy Kreme, Inc. (NASDAQ:DNUT) shares are trading lower in the premarket session on Tuesday.

The company reported fourth-quarter FY23 sales growth of 11.4% year over year to $450.9 million, beating the analyst consensus estimate of $438.94 million.

The company reported adjusted diluted EPS of $0.09, missing the analyst consensus of $0.13. 

Earnings were affected by increased depreciation and amortization as the company expanded the availability of doughnuts and Insomnia Cookies globally, Krispy Kreme said in a press release.

On October 3, 2023, the company announced it is exploring strategic alternatives for Insomnia Cookies. 

The company’s total organic revenue grew 13.2%, driven by high-impact global brand activations and seasonal offerings, increased points of access, and premiumization efforts. 

In the U.S. segment, net revenue grew 9.3%, with organic revenue growth of 13.7%. In the International segment, net revenue grew 15.2%, with organic revenue growth of 9%.

In the Market Development segment, net revenue grew 17.2%, and organic growth in the segment was 19.2%.

E-commerce as a percentage of retail sales increased 130 basis points to 19.3% of sales.

Adjusted EBITDA increased 14.7% to $64.1 million, while adjusted EBITDA margins improved 40 basis points to 14.2%.

As of December 31, 2023, the company has a total available liquidity of $197.2 million, including $38.2 million of cash and cash equivalents.

Outlook: Krispy Kreme expects FY24 adjusted diluted EPS of $0.27-$0.31 versus the $0.38 estimate. 

The company projects FY24 net revenue growth of 5%-7% and adjusted EBITDA growth of 8%-11%. 

Guidance for the full year 2024 includes operations from Insomnia Cookies.

Price Action: DNUT shares are trading lower by 3.83% to $13.30 premarket on the last check Tuesday. 

Photo via Wikimedia Commons

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