Krispy Kreme expands to Brazil with São Paulo store

CHARLOTTE, N.C. - Krispy Kreme, Inc. (NASDAQ: DNUT), the $939 million market cap doughnut chain currently trading near its 52-week low at $5.51, has announced its market entry into Brazil, with plans to open its first store in São Paulo through a joint venture with AmPm, the country’s largest convenience store chain. This move, expected to occur in late April, is part of the doughnut giant’s international franchise expansion strategy. According to InvestingPro data, the company’s net income is expected to grow this year, despite recent stock price challenges.

The inaugural shop will be located in the Avenida Juscelino Kubitschek area of São Paulo, a bustling neighborhood. The partnership with AmPm will leverage the convenience store’s extensive network, which includes approximately 1,500 retail locations across Brazil. The São Paulo shop is anticipated to create around 100 direct jobs, with more expected as Krispy Kreme grows its presence in the country. With annual revenue of $1.67 billion and a significant debt burden of $1.35 billion, this expansion represents a crucial growth initiative. For detailed analysis of Krispy Kreme’s expansion strategy and financial outlook, explore the comprehensive research available on InvestingPro.

Raphael Duvivier, President of International for Krispy Kreme, expressed excitement about bringing the brand’s fresh-made doughnuts to Brazil, emphasizing the strategic importance of the partnership with AmPm for sustainable and profitable growth. Renato Stefanoni, President of AmPm, also commented on the collaboration, highlighting the addition of Krispy Kreme’s premium-quality offerings to their stores. While the company maintains profitability with a gross margin of 26.8%, InvestingPro analysis indicates current short-term obligations exceed liquid assets, suggesting careful monitoring of expansion costs.

Krispy Kreme’s global presence includes more than 30 international franchise partners, which enables the company to scale efficiently. The doughnut chain, headquartered in Charlotte, N.C., operates in 40 countries and is known for its Original Glazed® doughnut.

This expansion into Brazil follows the company’s previously announced joint venture with AmPm in February 2024. The information regarding Krispy Kreme’s entry into the Brazilian market and its partnership with AmPm is based on a press release statement.

In other recent news, Krispy Kreme reported disappointing financial results for the fourth quarter of 2024, with earnings per share (EPS) at $0.01, significantly below the forecasted $0.10. The company also reported revenue of $404 million, falling short of the expected $416.09 million. In response to these results, Morgan Stanley downgraded Krispy Kreme’s stock to Underweight, reducing the price target to $6.00, while JPMorgan adjusted its price target to $8.00 but maintained an Overweight rating. Truist Securities also revised its price target to $12.00, maintaining a Buy rating despite the company’s guidance for fiscal year 2025 falling short of expectations.

Krispy Kreme announced the appointment of Nicola J. Steele as the new Chief Operating Officer, effective immediately, highlighting a strategic focus on operational leadership. The company continues to expand its partnerships, including a rollout with McDonald’s, aiming for presence in approximately 6,000 locations by the end of 2025. Despite these efforts, a recent cybersecurity incident has caused disruptions, impacting the company’s operations and financial performance. Krispy Kreme forecasts net revenue between $1,550 million and $1,650 million for 2025, with an anticipated organic revenue growth of 5-7%.

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