Krispy Kreme Stock Tumbles to All-Time Low as Doughnut Maker Softens Outlook

Krispy Kreme Inc. (DNUT) shares plummeted to an all-time low on Tuesday, February 25, 2025, following the company's release of fourth-quarter and full-year 2024 financial results. The stock fell by 23.40% to $6.98 in premarket trading, weighed down by the doughnut maker's worse-than-expected fourth-quarter earnings and weak full-year outlook.

Krispy Kreme reported a fourth-quarter FY24 sales decline of 10.4% year-on-year to $404 million, missing the analyst consensus estimate of $415.450 million. Organic revenue grew 1.8% to $400.6 million but was adversely impacted by an estimated 280 basis points of lost revenue linked to the 2024 Cybersecurity Incident. The company also incurred approximately $3 million of remediation expenses related to the incident.

Global Points of Access increased by 3,410, or 24.1%, to 17,557 in FY24. Revenue in the U.S. segment declined 17.2% Y/Y, the International segment grew 5.7%, and Market Development decreased 14.2%. The drop in U.S. sales is due to the sale of Insomnia Cookies ($57.4 million impact), a decline in retail sales, and the 2024 Cybersecurity Incident.

The operating loss widened to $11.5 million from $5.3 million in the previous year, while adjusted EBITDA plunged 28.4% Y/Y to $45.9 million. Adjusted EPS of $0.01 missed the consensus estimate of $0.10. The company held $28.9 million in cash and equivalents as of December end.

CEO Josh Charlesworth acknowledged the challenges faced by the company and outlined several strategic initiatives to drive capital-efficient growth:

1. Restructuring management teams to maximize profitable U.S. expansion and capital-light international growth.
2. Outsourcing U.S. logistics to improve operational efficiency and reduce costs.
3. Evaluating refranchising opportunities to drive capital-efficient growth.

Looking ahead, Krispy Kreme expects FY25 revenue of $1.55 billion—$1.65 billion, versus an estimate of $1.764 billion. The company sees FY25 adjusted EPS of $0.04 – $0.08, with an estimate of $0.30. Krispy Kreme anticipates FY25 adjusted EBITDA of $180 million—$200 million.

Investors should closely monitor Krispy Kreme's progress in implementing these initiatives and their impact on the company's financial performance in the coming quarters. The company's strategic moves and ability to navigate the challenges it faces will be crucial in determining its long-term success.