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CHARLOTTE - Krispy Kreme, Inc. (NASDAQ:DNUT), whose stock has declined over 60% in the past six months and is currently trading below InvestingPro’s Fair Value estimate, reported a significant net loss of $441.1 million for the second quarter ended June 29, 2025, including non-cash goodwill and other asset impairment charges totaling $406.9 million, and announced a comprehensive turnaround plan aimed at reducing debt and improving profitability.
The doughnut chain’s quarterly revenue fell 13.5% to $379.8 million compared to the same period last year, primarily due to the sale of its stake in Insomnia Cookies. Organic revenue declined 0.8% as growth in global points of access was offset by reduced discounting and lower doughnut shop transaction volume. The company’s trailing twelve-month revenue stands at $1.6 billion, with a concerning gross profit margin of 25.1%.
Adjusted EBITDA declined to $20.1 million from $54.7 million in the prior year quarter, with margins dropping to 5.3% from 12.5%, largely due to the now-terminated McDonald’s USA partnership, which officially ended on July 2, 2025.
"Our results for the second quarter primarily reflect the impact of unsustainable operating costs relative to unit demand in the McDonald’s USA partnership," said Krispy Kreme CEO Josh Charlesworth. "We are quickly removing our costs related to the McDonald’s partnership and growing fresh delivery through profitable, high-volume doors with major customers."
The company’s turnaround strategy focuses on four key components: refranchising international markets and restructuring its Western U.S. joint venture; improving return on invested capital by reducing capital intensity; expanding margins through greater operational efficiency; and driving sustainable U.S. growth based on profitable revenue streams. According to InvestingPro data, this turnaround is crucial as the company operates with a concerning current ratio of 0.35 and significant debt burden, with total debt reaching $1.46 billion. Get access to 13 additional ProTips and comprehensive financial analysis with an InvestingPro subscription.
As part of its debt reduction efforts, Krispy Kreme has halted its quarterly cash dividend and sold its remaining stake in Insomnia Cookies for $75 million. The company is also in discussions to reduce its ownership stake in its Western U.S. joint venture with WKS Restaurant Group and has initiated refranchising processes in several international markets including Australia, New Zealand, Japan, Mexico, and the UK.
The company’s global points of access increased by 14.3% to 18,113, though this figure includes approximately 2,400 McDonald’s locations that were closed after the quarter ended. For detailed insights into Krispy Kreme’s financial health, operational metrics, and growth potential, access the comprehensive Pro Research Report available exclusively on InvestingPro, covering over 1,400 US stocks with expert analysis and actionable intelligence.
This article is based on a press release statement from Krispy Kreme, Inc.
In other recent news, Krispy Kreme reported a wider-than-expected loss for the second quarter as the company navigates the challenges following the end of its partnership with McDonald’s. The doughnut chain posted an adjusted loss of $0.15 per share, which was significantly below analyst expectations of a $0.04 loss. However, revenue slightly exceeded estimates, coming in at $379.8 million compared to the consensus of $378.66 million. Despite this, revenue marked a 13.5% decline from the same period last year, with organic revenue decreasing by 0.8% year-over-year. These developments are part of Krispy Kreme’s ongoing comprehensive turnaround plan.
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