Krispy Kreme loss widens in quarter, year
April 17, 2008
by FoodBusinessNews.net Staff
WINSTON-SALEM, N.C. — Increases in the cost of raw materials and financial pressures on various franchisees are among the factors that negatively impacted financial results for Krispy Kreme Doughnuts, Inc. for the year ended Feb. 3.
For the year, the company posted a loss of $67,051,000, which compared with a loss of $42,236,000 during the previous year. Revenue for the year was $429,319,000, down 7% from $461,195,000 during the previous year. The company said the decreases in revenues are a result of a decrease in company store revenue and supply chain revenue.
"Although it’s clear from our fourth-quarter and year-end results that we have more work to do in order to produce the financial results we believe are possible, there were some successes in fiscal 2008," said Jim Morgan, chairman, president and chief executive officer. "Our international expansion continues to be a source of exciting growth, we are seeing encouraging initial results from company factory stores that have been converted to satellite hot shops as part of our hub and spoke strategy, and Krispy Kreme’s entire menu now is zero grams trans fat per serving. In addition, we remediated all material weakness in our internal control over financial reporting.
"Beyond the challenges we still face, we believe there are a multitude of opportunities, and we are committed to providing corporate performance that is in keeping with the iconic brand we represent."
For the fourth quarter ended Feb. 3, the company sustained a loss of $31,815,000 compared with a loss of $24,416,000 during the same quarter of the previous year. Revenue for the quarter was $110,948,000, down 1% from $112,188,000 during the same quarter of the previous year.