Krispy Kreme earnings climb 97% in quarter
Dec. 1, 2011
by Eric Schroeder
WINSTON-SALEM, N.C. — Net income at Krispy Kreme Doughnuts, Inc. jumped 97% to $4,717,000, equal to 7c per share on the common stock, in the third quarter ended Oct. 30, up from $2,390,000, or 3c per share, in the same period last year.
Revenues rose 9% to $98,708,000 from $90,228,000.
“Our third-quarter performance reflects continued progress in strengthening our financial condition and realizing our vision for the Krispy Kreme brand,” said James H. Morgan, president and chief executive officer. “We generated a healthy increase in revenues, recorded our twelfth consecutive quarter of positive same-store sales at company stores, and delivered substantial improvements in both profitability and operating cash flow.”
Mr. Morgan said Krispy Kreme is raising its fiscal 2012 outlook for consolidated operating income, exclusive of impairment charges and lease termination costs, to between $24 million and $26 million, up from $22 million and $24 million projected during the second quarter.
For the nine months ended Oct. 30, net income was $22,727,000, or 33c per share, up 151% from $9,065,000, or 13c per share, in the same period of fiscal 2011. Revenues were $301,260,000, up 11% from $270,277,000.
Krispy Kreme said it expects to open 5 to 10 company stores, between 10 and 15 domestic franchise stores, and more than 60 international franchise stores in fiscal 2013. Preliminary guidance for fiscal 2013 operating income has been set at between $29 million and $33 million.
Separately, Krispy Kreme said it has signed additional development agreements with its Japanese franchisee, Krispy Kreme Doughnut Japan Co., Ltd. As part of the new agreements, the franchisee will build an additional 19 locations over the next five years that will be located in the Kyushu and Chugoku regions of Japan.
Krispy Kreme recently announced the development of 73 new locations in the Kanto, Kansai and Chubu regions of Japan.
“This expanded commitment by our Japanese franchise partners speaks to the confidence we all have in the success of this relationship,” said Jeff Welch, president of Krispy Kreme International. “We are very excited about the possibilities this region of the world holds for Krispy Kreme.”