CHARLOTTE, N.C. - Krispy Kreme , Inc. (NASDAQ:DNUT) reported third-quarter earnings that fell short of analyst estimates, sending shares down 7.3% in after-hours trading.
The doughnut chain posted an adjusted loss of -$0.01 per share for the quarter ended September 29, missing the consensus estimate of $0.01 earnings per share. Revenue came in at $379.9 million, slightly below analysts' expectations of $380.33 million but up 3.5% YoY on an organic basis.
Krispy Kreme's net income for the quarter was $37.6 million, boosted by a $39.6 million gain from the sale of its majority stake in Insomnia Cookies. However, adjusted EBITDA fell 20.7% to $34.7 million, with margins declining 160 basis points to 9.1%.
CEO Josh Charlesworth cited underperformance in the U.K. and higher vehicle accident claims costs in the U.S. as factors impacting profitability. He noted, "Now well into my first year as CEO, we have streamlined and focused our business with the sale of our majority stake in Insomnia Cookies complete and the acceleration of our US DFD expansion underway."
The company maintained its focus on expanding its Delivered Fresh Daily (DFD) network, with DFD sales growing 15% in the quarter. Krispy Kreme also highlighted its nationwide U.S. rollout at McDonald's (NYSE:MCD), expecting to be in nearly 2,000 McDonald's restaurants by the end of 2024.
Looking ahead, Krispy Kreme adjusted its full-year guidance, now expecting adjusted EPS of $0.18 to $0.22, compared to the analyst consensus of $0.25. The company projects full-year revenue between $1.65 billion and $1.69 billion.
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