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• Net Revenue: $375.2 million, within guidance, reflecting growth offset by the sale of Insomnia Cookies.

• Organic Revenue Decline: 1%, due to consumer softness in a challenging macro environment.

• Adjusted EBITDA: $24 million with a margin of 6.4%.

• US Segment Organic Revenue Decline: 2.6%, impacted by consumer softness and reduced discount days.

• Average Revenue per Door (APD): $587, down from the previous year.

• International Organic Revenue Growth: 1.5%, led by growth in Canada.

• Market Development Organic Revenue Growth: 2.7%, driven by franchise expansion.

• Adjusted Earnings Per Share: $0.05, a decline from the prior year.

• Cash Flow from Operating Activities: Used $20.8 million, expected to normalize throughout the year.

• Q2 Revenue Expectation: $370 to $385 million.

• Q2 Adjusted EBITDA Expectation: $30 to $35 million.

• Warning! GuruFocus has detected 8 Warning Signs with DNUT.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Krispy Kreme Inc (NASDAQ:DNUT) is focused on profitable US expansion and international franchise growth, aiming for 100,000 points of access.

• The company is spotlighting its original-based doughnut, which appeals to value-conscious consumers and delivers higher margins.

• Krispy Kreme Inc (NASDAQ:DNUT) is expanding its presence in club stores like Costco and Sam's Club, achieving high sales volumes.

• The company is outsourcing its fresh doughnut delivery to improve efficiency and reduce costs, with plans to fully outsource US logistics by mid-next year.

• International franchise partners are delivering strong results, with successful launches in markets like Brazil and France.

Negative Points

• Organic revenue declined by 1% due to consumer softness in a challenging macro environment.

• The company is experiencing a decline in adjusted EBITDA, impacted by the sale of Insomnia Cookies and cybersecurity issues.

• Krispy Kreme Inc (NASDAQ:DNUT) is pausing its expansion with McDonald's due to lower-than-expected demand after initial marketing efforts.

• The company is discontinuing quarterly dividends to focus on paying down debt and improving financial flexibility.

• There is a planned reduction in discount days, which contributed to a decline in organic revenue in the US segment.

Q & A Highlights

Q: How are you thinking about CapEx given the current changes and the McDonald's decision to pause? Was it your decision or McDonald's? A: Jeremiah Ashukian, CFO: Our capital priorities focus on strengthening the balance sheet and business reinvestment. We're becoming more disciplined with capital allocation, investing in high-return areas. The McDonald's pause allows us to adjust spending. Joshua Charlesworth, CEO: We're confident in the US expansion but need to ensure profitable growth. We're working with McDonald's to improve sales and simplify operations before further expansion.