WINSTON-SALEM, N.C. — Krispy Kreme Doughnuts Inc. exceeded its expectations in the first quarter, boosted in part by four separate limited-time offers that ran during the quarter.
Net income in the quarter ended May 3 was $10,666,000, equal to 25c per share on the common stock, up 10% from $9,656,000, or 24c per share, in the same period a year ago. Revenues increased 9% to $132,474,000 from $121,580,000.
Tony Thompson, president and chief executive officer, told analysts during a June 10 conference call that the limited-time offers demonstrated Krispy Kreme’s ability “to engage with our customers through product innovation.”
“Several of the premium L.T.O. donuts carried a higher price point, and our guests responded favorably,” he said. “We plan to continue utilizing premium price points on certain L.T.O. products, and leverage our premium brand equity.”
Examples of Krispy Kreme’s L.T.O. products included Valentine’s Day donuts and several spring-themed donuts, such as an egg-shaped donut, an Oreo dirt cake donut and a honey bee donut. The company also is in the midst of a “taste of the south” promotion where it is offering lemon crème cake donuts and peach pie donuts.
In addition to the L.T.O. donuts, Krispy Kreme ramped up its beverage offerings during the first quarter, including the introduction of several lattes.
“We are very pleased with the results of this new menu item,” Mr. Thompson said. “The lattes, I think, did extremely well for our launch. And I think what you’re going to see going forward is in the short term or the near term, more initiatives like this launch of the frozen latte and potential other items such as that as we work on our longer term comprehensive coffee plan. What we are doing, though, is we are doing a lot of trialing inside of our shops and using special occasion days to do that. And we have a lot of new customers coming in, and that seems to be working well.”
