Krispy Kreme Doughnuts Inc (NASDAQ:DNUT) has reported third-quarter revenue and earnings that fell short of expectations as it entered new markets, sending its shares lower on Thursday morning.
The multinational doughnut and coffeehouse chain highlighted its continued global expansion as it opened shop in Switzerland and Kazakhstan and its late-night cookie concept Insomnia Cookies expanded internationally into Canada and the UK.
“We delivered the joy that is Krispy Kreme through powerful specialty doughnut offerings including the popular M&Ms collection, which was available in 17 countries, our extremely successful limited-time offering with Pumpkin Spice, and an innovative new partnership with Hailey Bieber to promote her Krispy Kreme inspired strawberry glazed peptide lip treatment,” commented CEO Mike Tattersfield.
Revenue for the three months to October 1, 2023, rose 7.9% to $407.4 million, below analysts’ consensus of $414 million.
It reported a net loss of $40.3 million, primarily driven by non-cash, income tax expense accrual, while adjusted underlying earnings rose 13.5% to $43.7 million.
Adjusted earnings per share improved from nil to $0.03, but analysts expected twice that.
Looking forward, Tattersfield said momentum continues into the seasonally strong fourth quarter enhanced by continued growth in global points of access, and a strong Halloween Scooby-Doo offering.
“We expect to open in Ecuador and France in the fourth quarter taking our new market openings to seven in 2023,” he added.
“We are also excited about our continued partnership with McDonald’s, which we believe has validated the attractiveness of the quick-service restaurant channel.”
The company has maintained its full-year guidance for revenue to be 8% to 10% higher at between $1.65 billion and $1.68 billion.
It also still expects adjusted EPS for the year to be 7% to 17% up at between $0.31 and $0.34.
The company’s shares were down 9.2% at $12.22 in late morning trade in New York, paring 2023's gains to 17%.
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