Krispy Kreme returns to profitability in quarter

by Staff
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WINSTON-SALEM, N.C. — With the help of improved same-store sales, Krispy Kreme returned to profitability during the second quarter.

For the quarter ended Aug. 1, the company had income of $2,207,000, equal to 3c per share on the common stock, which compared with a loss of $157,000 during the same quarter of the previous year. Revenue for the quarter was $87,932,000, up 6% from $82,730,000 during the same quarter of the previous year.

“Our financial results improved from the year-ago period as we realized revenue growth in all business segments, increased our consolidated operating income by roughly half and delivered positive net income for the third consecutive quarter,” said Jim Morgan, president and chief executive officer. “We are encouraged by the same-store sale momentum at our company stores but also recognize that we must strengthen our execution so that top-line performance can more directly impact bottom-line profitability.”

For the six months ended Aug. 1, the company had income of $6,675,000, or 10c per share, up sharply from $1,711,000, or 3c per share, during the same period a year ago. Revenue for the six months was $180,049,000, up 2% from $176,150,000 during the same period of the previous year.

The company also raised its outlook as it now expects fiscal 2011 operating income to be in the range of $13 million to $17 million, up from a previous guidance of $11 million to $15 million.

“As we look ahead, we will continue working diligently to implement our strategic initiatives with the intention of maximizing shareholder value,” Mr. Morgan said. “Our transition is an ongoing process, and we are confident we can build an even stronger foundation for the future by continuing to both invest in our businesses and support our domestic and international franchisees. These steps are critical to accelerating long-term growth in both revenues and earnings. We believe that we are only beginning to unlock the potential of the Krispy Kreme brand for our guests, customers, franchisees, team members and shareholders.”
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