Krispy Kreme puts threefold expansion plan in play

by Eric Schroeder
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Krispy Kreme Doughnuts is on the move.

ORLANDO, FLA. — Less than eight months into his tenure as president and chief executive officer of Krispy Kreme Doughnuts, Inc., Anthony N. “Tony” Thompson continues to be impressed by the future prospects for the Winston-Salem, N.C.-based company.

In December, Mr. Thompson, who took the helm at Krispy Kreme on June 1, 2014, said the biggest surprise in his first six months on the job was the fact the company does as much or more business after 2 p.m. as it does before 2 p.m. Then, in a Jan. 12 presentation at the ICR XChange in Orlando, he said he sees an “enormous” amount of opportunity for expansion for the company.

To capitalize on expansion opportunities, Krispy Kreme has developed a three-pronged approach: infill, pursue and evaluate.

He said Krispy Kreme will infill by expanding with existing franchise partners and growing out existing company-owned markets, which allows Krispy Kreme to leverage its supply chain efficiencies and capitalize on brand awareness.

“Recently we have announced add-on agreements, including Southern California, South Korea and Mexico,” he said. “In addition, we continue to expand company markets, including Atlanta and Jacksonville.”

The company also is pursuing new franchise interest with a goal of growing its footprint in underpenetrated areas and new markets, Mr. Thompson said. Recent announcements include Dallas, Houston, Maryland, Northern Virginia and Arkansas in the United States, and Colombia and Bangladesh internationally.

The third part of the company’s expansion approach centers on evaluation.

“We will evaluate new markets, regions and areas where we have very limited or no presence at all,” Mr. Thompson said. “We expect to announce new development agreements over the coming quarters and years as we continue to grow the pipeline.”

Offering a glimpse at fiscal 2015 financial guidance, Mr. Thompson said Krispy Kreme projects company same-store sales will be positive, with double-digit system-wide unit growth with 20 to 35 net domestic openings and 95 to 110 international openings. Total revenues are expected to increase between 8% and 11% for the year, while adjusted net income is forecast between $55 million and $59 million, with adjusted earnings per share of 79c to 85c.

“I could not be more excited about the future of Krispy Kreme and our tremendous growth opportunities,” Mr. Thompson said. “We are well positioned with a solid business model, a strong talented team, and an incredibly powerful brand to drive continued success.”
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READER COMMENTS (3)

By Lois Fernandez 5/1/2017 1:21:17 PM
What happened to the Krispy Kreme that was supposed to be built in Fort Myers? I have been waiting impatiently.

By Marantha Edwards 1/13/2015 12:38:27 PM
Krispy Kreme Donuts would be a huge success in Leesburg, VA. Just 15 miles west of Dulles and strategically located in the corridor that is the transportation between West Virginia, Western Loudoun and Northern VA.....you'll have many Krispy Kreme lovers out here.

By Al Sautner 1/13/2015 10:25:44 AM
I love the Krispy Kreme products. I would like to see more of them in the SC area. I think we should install machines in the windows of all stores so people coming in can see the product being made. The product is great and Hope to see the new CEO do well with this product line. Al Sautner