- 9% increase in net revenue to $408 million
- Reiterates guidance for the full year 2023
- Organic revenue up 11.4%
Investors reacted badly to Krispy Kreme’s (DNUT:NASDAQ) second quarter results in after-hours trading pushing the share price down nearly 14% to around the $12 mark.
The doughnut wholesaler and retailer reported a 9% increase in net revenue $408 million for the second quarter ending 2 July 2023 meeting analysts’ expectations.
Organic revenue grew 11.4% with all sales channels including doughnut, cookie shops, ‘delivered fresh daily doors' (DFD) and e-commerce contributed to 12.7% organic growth in the second quarter.
Krispy Kreme reaffirmed its previous guidance for the full year 2023.
The Charlotte, North Carolina-based company expects net revenue of $1.65 billion to $1.68 billion an increase of 8% to 10%, an adjusted diluted earnings per share full-year earnings in the range of 31 cents to 34 cents per share, up 7% to 17%.
SO, WHAT’S SPOOKED INVESTORS?
A number of reasons could be given for the share price reaction. Profit-taking could be one.
Between the start of the year and Wednesday night's close its shares have added about 39.5% compared to the S&P 500’s gain of 16.4%.
Given the stock has enjoyed such strong gains, there may have been an expectation for upgrades rather than just a reaffirmation of previous guidance for the full year 2023.
However, the doughnut wholesaler has a growing all-channel strategy. It has an ongoing partnership with McDonalds’s (MCD:NYSE). Krispy Kreme doughnuts are available at 160 McDonald’s stores and drive-thru outlets in Kentucky.
The company has announced a partnership with Amazon Fresh (AMZN:NASDAQ) – online and in two of their shops in Chicago.
Mike Tattersfield CEO of Krispy Kreme said the company also has plans to open in three to five additional markets in 2023 including France by the end of the year. Switzerland was the first opening for the company in Continental Europe.
