Krispy Kreme Doughnuts Earnings: Sugar High Wears Off

Krispy Kreme Doughnuts Inc. (NYSE:KKD) reported its results for the second quarter. Krispy Kreme Doughnuts and its subsidiaries are engaged in the sale of doughnuts and related items through company-owned stores.

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Krispy Kreme Doughnuts Inc. Earnings Cheat Sheet

Results: Net income for Krispy Kreme Doughnuts Inc. fell to $4.9 million (7 cents per share) vs. $8.8 million (12 cents per share) a year earlier. This is a decline of 44.2% from the year-earlier quarter.

Revenue: Rose 4.3% to $102.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Krispy Kreme Doughnuts Inc. fell short of the mean analyst estimate of 8 cents per share. It fell short of the average revenue estimate of $111.4 million.

Quoting Management: President and Chief Executive Officer James H. Morgan commented, “We were very pleased with our quarterly performance, as we drove both solid same store sales growth and increased guest traffic. The top-line momentum translated into significant year-over-year increases in both operating income and adjusted earnings per share. The period was highlighted by our 75th Birthday celebration and by National Doughnut Day, each of which provided consumers another reason to visit Krispy Kreme and create some lasting joyful memories. Based on our performance to date, we are reiterating our operating income guidance for the full year of $29 to $33 million, although we now believe the high end of that range is increasingly achievable.”

Key Stats:

Revenue has risen for the last four quarters. Revenue increased 3.7% to $108.5 million in the first quarter. The figure rose 11.2% in the fourth quarter of the last fiscal year from the year earlier and climbed 9.4% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now fallen short of estimates in the last two quarters. In the first quarter, it missed expectations by one cent with net income of 6 cents versus a mean estimate of net income of 7 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from 7 cents a share to 5 cents over the last sixty days. For the fiscal year, the average estimate has moved down from 35 cents a share to 25 cents over the last sixty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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