CHARLOTTE, NC.  — Krispy Kreme donuts, which were in more than 2,400 McDonald’s restaurants by the end of the company’s fiscal year first quarter on March 30, will enter no new McDonald’s in the second quarter, Krispy Kreme, Inc. announced May 8 while giving financial results for the first quarter.

“Our two companies have partnered closely together during this time to support execution, marketing and training, delivering a great consumer experience, and we’re pleased with many aspects of the program,” said Joshua Charlesworth, president and chief executive officer of Krispy Kreme, in a May 8 earnings call. “However, we are seeing that after the initial marketing launch, demand drops below our expectations, requiring intervention to deliver sustainable, profitable growth. We are partnering with McDonald’s to increase sales by stimulating higher demand and cutting costs by simplifying operations.

“At the same time, we are reassessing our deployment schedule together with McDonald’s while we work to achieve a profitable business model for all parties. Given this, we do not expect to launch any additional restaurants in Q2. That said, we continue to believe in the long-term opportunity of profitable growth through our US nationwide expansion, including McDonald’s.”

Krispy Kreme’s stock on the Nasdaq closed at $3.26 per share on May 8, down 25% from a close of $4.33 per share on May 7.

During the earnings call, Charlesworth was asked whether Krispy Kreme or McDonald’s made the decision to pause the partnership.

“As with all our customers, we make decisions with them, and so obviously we partner with McDonald’s to make decisions about rolling out distribution, and so you know I very much reinforce that this is something we’re working together with them on and appreciate their partnership,” Charlesworth said.

Plans were announced in March 2024 to expand their donut partnership to all McDonald’s restaurants in the United States. Demand dipped for Krispy Kreme donuts at McDonald’s in the fourth quarter of 2024.

A net loss in the quarter

In the first quarter of 2025, Krispy Kreme sustained a loss of $33 million, which compared with a loss of $8.5 million in the previous year’s first quarter. Adjusted EBITDA declined to $24 million from $58 million. Adjusted EBITDA margin declined to 6.4% as the company is investing ahead of growth and navigating a challenged global consumer backdrop linked to macroeconomic, weather and inflationary factors, according to Krispy Kreme.

Net revenue fell 15% to $375 million from $443 million with $64 million of the decrease associated with the divestiture of a majority stake in Insomnia Cookies in the third quarter of fiscal 2024. Organic revenue decreased 1%.

Global points of access as of March 30 were 17,982, up 21% from 14,814 a year ago. Charlesworth said Krispy Kreme still has a long-term goal of 100,000 points of access.

“However, in this challenging macro environment, we are prioritizing paying down debt and deleveraging our balance sheet, generating positive cash flow and pursuing only profitable growth based on sustainable revenue streams,” he said.

The company withdrew its prior full-year outlook due to macroeconomic softness and uncertainty around the McDonald’s deployment schedule. In the second quarter, Krispy Kreme expects net revenue of $370 million to $385 million and adjusted EBITDA of $30 million to $35 million.

Consumer softness in the US

In the United States, net revenue declined 20% to $237 million from $296 million in the previous year’s first quarter, primarily due to the sale of Insomnia Cookies. Organic revenue declined 2.6%. Expected consumer softness more than offset growth of 35% in points of access.

“As we grow bigger through our US nationwide expansion, we’ll allow production hubs to serve both in-shop guests with our iconic hotline, signaling fresh donuts as well as profitable DFD (delivered fresh daily) customers,” Charlesworth said. “We are actively value engineering our footprint to lower costs as we grow. A great example is our new Minneapolis hub, which is under construction. Rather than building from the ground up, we’re retrofitting an existing building in a high traffic trade area, which is delivering a 20% savings in capital and real estate costs.”

In Krispy Kreme’s International business, net revenue declined 4.1% to $120 million, primarily due to foreign currency translation impacts of $8.4 million. Organic revenue increased 1.5%.

“We are evaluating opportunities to re-franchise Australia, New Zealand, Japan, Mexico, and the UK and Ireland,” Charlesworth said. “Proceeds from these efforts will be used to deliver and strengthen our balance sheet. Our international franchise partners, whether in emerging markets like Brazil and France or more established ones like Korea and the Middle East, continue to deliver strong results, underscoring the value of local scale master franchise partners.”

In the Market Development business, net revenue fell 14% to $19 million, reflecting a $3.6 million impact of franchise acquisitions and lower equipment sales.