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CHARLOTTE - Krispy Kreme, Inc. (NASDAQ:DNUT) has sold its remaining ownership stake in Insomnia Cookies Holdings, LLC to Insomnia Cookies and certain existing shareholders for approximately $75 million in cash, according to a press release statement issued by the company. The transaction comes at a crucial time for Krispy Kreme, which currently carries a substantial debt burden of $1.46 billion and maintains a concerning current ratio of 0.35, according to InvestingPro data.
The transaction follows Krispy Kreme’s earlier sale of its majority ownership stake in Insomnia Cookies on July 17, 2024. The company stated that it plans to use the proceeds for debt reduction after covering transaction-related fees and expenses. This focus on debt reduction appears timely, as InvestingPro analysis indicates the company’s overall financial health score is currently rated as WEAK, with short-term obligations exceeding liquid assets.
"We continue to take swift, decisive action to de-leverage our balance sheet and drive sustainable, profitable growth," said Josh Charlesworth, CEO of Krispy Kreme. "This is an important step as we focus on our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth."
The divestiture represents Krispy Kreme’s complete exit from its investment in Insomnia Cookies, allowing the doughnut maker to focus on its core business operations. Krispy Kreme currently operates in more than 40 countries through its network of doughnut shops, retail partnerships, and digital business.
This transaction comes as part of Krispy Kreme’s broader strategy to strengthen its financial position. The company, headquartered in Charlotte, North Carolina, is known for its Original Glazed doughnuts and has been expanding its global presence through various distribution channels.
The sale was announced on Tuesday, June 10, 2025.
In other recent news, Krispy Kreme reported its first-quarter 2025 earnings, revealing a miss on earnings per share (EPS) expectations with an adjusted EPS of negative $0.05, below the forecast of negative $0.04. Revenue came in at $375.2 million, slightly under the expected $385.11 million. Following the earnings report, Krispy Kreme’s stock experienced a significant decline. In response to the company’s financial performance, JPMorgan downgraded Krispy Kreme’s stock rating from Overweight to Neutral, citing concerns over strategic shifts and ownership concentration. Similarly, Truist Securities downgraded the stock from Buy to Hold due to concerns over management’s execution and recent performance. Evercore ISI also revised its price target for Krispy Kreme shares, lowering it from $9 to $3, while maintaining an In Line rating, driven by a 20% reduction in estimated EBITDA for 2025 and 2026. The company has paused its expansion into McDonald’s locations and is focusing on reducing debt and improving cash flow. Investors are closely watching Krispy Kreme’s strategic moves and financial performance in light of these developments.
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