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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Krispy Kreme Inc | NASDAQ:DNUT | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.64 | 5.58 | 5.78 | 0 | 08:01:28 |
From Mar 2024 to Mar 2025
Second quarter Net Revenue grows 7.3%, Organic Revenue increases 7.8%
Updated 2024 guidance reflects sale of majority stake in Insomnia Cookies
Krispy Kreme, Inc. (NASDAQ: DNUT) (“Krispy Kreme”, “KKI”, or the “Company”) today reported financial results for the quarter ended June 30, 2024.
Second Quarter Highlights (vs Q2 2023)
“Krispy Kreme had another strong quarter as our fresh doughnuts are becoming even easier to purchase and more available globally,” said Josh Charlesworth, CEO. “Our innovative specialty doughnut collections continue to resonate with consumers and drove increased Delivered Fresh Daily (“DFD”) and digital sales in the quarter.”
“Our points of access also grew, and we’re excited about upcoming launches in Germany, Brazil, and our recent announcements of entries into Spain and Morocco,” continued Charlesworth. “In the U.S., our profitable nationwide expansion is accelerating as we grow with existing customers and add new national partners. This includes the nationwide rollout to McDonald’s, starting this fall in the Midwest with Chicago.”
“The recent sale of a majority stake in Insomnia Cookies allows us to focus on our core strategy of producing, selling, and distributing fresh doughnuts daily whilst also further improving our financial profile,” he said.
Financial Highlights
Quarter Ended
$ in millions, except per share data
June 30, 2024
July 2, 2023
Change
GAAP:
Net revenue
$
438.8
$
408.9
7.3
%
Operating income
$
6.9
$
5.6
21.5
%
Operating income margin
1.6
%
1.4
%
20 bps
Net (loss)/income
$
(4.9
)
$
0.1
nm
Net (loss)/income attributable to KKI
$
(5.5
)
$
0.2
nm
Diluted (loss)/income per share
$
(0.03
)
$
0.00
$
(0.03
)
Non-GAAP(1):
Organic revenue
$
440.2
$
408.2
7.8
%
Adjusted net income, diluted
$
9.1
$
11.4
(20.1
)%
Adjusted EBITDA
$
54.7
$
48.8
12.1
%
Adjusted EBITDA margin
12.5
%
11.9
%
60 bps
Adjusted diluted EPS
$
0.05
$
0.07
$
(0.02
)
Notes:
(1)
Non-GAAP figures – please refer to Reconciliation of Non-GAAP Financial Measures.
Key Operating Metrics
Quarter Ended
$ in millions
June 30, 2024
July 2, 2023
Change
Global Points of Access
15,853
12,872
23.2
%
Sales per Hub (U.S.) TTM
$
5.0
$
4.7
6.4
%
Sales per Hub (International) TTM
$
10.1
$
9.9
2.0
%
Digital Sales as a Percent of Retail Sales
22.2
%
18.8
%
340 bps
Second Quarter 2024 Consolidated Results (vs Q2 2023)
Krispy Kreme’s second quarter results represent continued execution of its omni-channel strategy, with net revenue growth of 7.3% to $438.8 million, compared to $408.9 million last year. GAAP net loss was $4.9 million compared to prior year net income of $0.1 million. GAAP diluted loss per share was $(0.03), a decline of $(0.03) from the same quarter last year.
Total company organic revenue grew 7.8%, fueled by a 23.2% increase in POA, a digital sales increase of 22%, and an increase in DFD sales of 18%, driven by the success of global brand activations including the Dolly Parton Southern Sweets collection, and Kit Kat, among others.
Adjusted EBITDA in the quarter grew 12.1% to $54.7 million, with Adjusted EBITDA margins improving 60 bps to 12.5%, benefiting from the optimization of the Company’s Hub and Spoke strategy and SG&A leverage driven by cost controls and lower compensation costs. Adjusted Net Income, diluted declined 20.1% to $9.1 million in the quarter. Adjusted Diluted EPS declined to $0.05 from $0.07 in the same quarter last year, primarily driven by increased depreciation and amortization linked to the strategy of making fresh doughnuts more available and Insomnia Cookies’ continued expansion.
Second Quarter 2024 Segment Results (vs Q2 2023)
U.S.: In the U.S. segment, net revenue grew $21.9 million, or 8.2%, with organic revenue growth of 8.4%. Revenue growth was driven by innovative specialty doughnut collections which continued to resonate with consumers, resulting in a 24% increase in Delivered Fresh Daily sales and a 26% increase in digital sales. Sales per hub in the U.S. increased 6.4% to $5.0 million, with DFD average sales per door per week increasing 4% to $657.
U.S. Adjusted EBITDA increased 16.3% to $32.7 million with Adjusted EBITDA margin expansion of 80 basis points to 11.3%, driven by the impact of labor and waste optimization and productivity benefits from the Company’s Hub and Spoke model, partially offset by increased promotional activity and McDonald’s start up costs.
International: In the International segment, net revenue grew $4.7 million, or 3.9%. International organic revenue grew 5.0%, driven by record POA growth of 1,515, or 39%, and successful marketing activations.
International Adjusted EBITDA decreased 12.3% to $21.7 million with adjusted EBITDA margin declining approximately 320 basis points to 17.3%, primarily linked to softer transaction volumes in the U.K.
Market Development: In the Market Development segment net revenue and organic revenue increased $3.4 million, or 16.1%, driven by greater equipment sales than in the prior year.
Market Development Adjusted EBITDA grew 22.7% to $12.9 million. Adjusted EBITDA margins expanded 280 basis points to 53.1%, driven by greater flow through from product sales.
Balance Sheet and Capital Expenditures
During the second quarter of 2024, strong Adjusted EBITDA translated to GAAP Operating Cash Flow of $33.3 million. The Company invested $31.7 million in capital expenditures, driven primarily by the investments in the Hub and Spoke model for the U.S. expansion of the DFD network. This drove positive Free Cash Flow of $1.6 million in the quarter.
Subsequent to the quarter, the Company received $127.4 million following the sale of a majority stake in Insomnia Cookies and have received an additional $45 million following the refinancing of intercompany debt.
2024 Financial Guidance
Krispy Kreme provides the following guidance update for the full year 2024 (vs FY2023) solely to reflect the recent sale of a majority ownership stake in Insomnia Cookies, which closed on July 17, 2024.
The Company expects net leverage to trend towards 3.5x by year end, as we make progress towards our 2026 goal of approximately 2.0x to 2.5x net leverage.
Definitions
The following definitions apply to terms used throughout this press release:
Conference Call
Krispy Kreme will host a public conference call at 8:30 AM Eastern Time today to discuss its results for the second quarter of 2024. The conference call can be accessed by dialing 1 (800) 715-9871 and entering the conference ID 5985470. International participants can access the call via the corresponding number listed HERE and entering the conference ID 5985470. To listen to the live audio webcast and Q&A, visit the Krispy Kreme investor relations website at investors.krispykreme.com. A replay and transcript of the webcast will be available on the website within 24 hours after the call. Krispy Kreme’s earnings press release and related materials will also be available on the investor relations section of the Company’s website.
About Krispy Kreme
Headquartered in Charlotte, N.C., Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Our iconic Original Glazed® doughnut is universally recognized for its hot-off-the-line, melt-in-your-mouth experience. Krispy Kreme operates in 40 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing digital business with more than 15,500 fresh points of access. Our purpose of touching and enhancing lives through the joy that is Krispy Kreme guides how we operate every day and is reflected in the love we have for our people, our communities and the planet. Connect with Krispy Kreme Doughnuts at www.KrispyKreme.com, or on one of its many social media channels, including www.Facebook.com/KrispyKreme and www.Twitter.com/KrispyKreme.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. The words “continue,” “towards,” “expect,” “outlook,” “guidance,” “explore,” or similar words, or the negative of these words, identify forward-looking statements. Such forward-looking statements are based on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed by us with the Securities and Exchange Commission (“SEC”) and described in the other filings we make from time to time with the SEC. We believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
Non-GAAP Measures
This press release includes certain non-GAAP financial measures including organic revenue growth, Adjusted EBITDA, Adjusted Net Income, Diluted, Adjusted Diluted EPS, Net Debt, Fresh Revenue from Hubs with Spokes and Sales per Hub, which differ from results using U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP financial measures in conjunction with our historical consolidated financial statements and notes thereto filed with the SEC.
To the extent that the Company provides guidance, it does so only on a non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inability to predict the amount and timing of impacts outside of the Company’s control on certain items, such as net income and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
Krispy Kreme, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
Quarter Ended
Two Quarters Ended
June 30, 2024 (13 weeks)
July 2, 2023 (13 weeks)
June 30, 2024 (26 weeks)
July 2, 2023 (26 weeks)
Net revenues
Product sales
$
429,411
$
400,348
$
862,923
$
811,022
Royalties and other revenues
9,398
8,534
18,584
16,810
Total net revenues
438,809
408,882
881,507
827,832
Product and distribution costs
107,846
111,106
214,861
228,939
Operating expenses
212,504
189,165
417,699
380,573
Selling, general and administrative expense
64,466
62,582
136,040
124,050
Marketing expenses
12,416
9,770
24,531
19,623
Pre-opening costs
967
1,104
2,072
1,868
Other (income)/expenses, net
(849
)
314
(649
)
(4,949
)
Depreciation and amortization expense
34,600
29,196
68,186
57,135
Operating income
6,859
5,645
18,767
20,593
Interest expense, net
14,452
12,063
28,188
24,051
Other non-operating expense, net
949
1,061
1,522
2,060
Loss before income taxes
(8,542
)
(7,479
)
(10,943
)
(5,518
)
Income tax (benefit)/expense
(3,611
)
(7,563
)
651
(7,246
)
Net (loss)/income
(4,931
)
84
(11,594
)
1,728
Net income/(loss) attributable to noncontrolling interest
560
(139
)
2,431
1,806
Net (loss)/income attributable to Krispy Kreme, Inc.
$
(5,491
)
$
223
$
(14,025
)
$
(78
)
Net (loss)/income per share:
Common stock — Basic
$
(0.03
)
$
0.00
$
(0.08
)
$
0.00
Common stock — Diluted
$
(0.03
)
$
0.00
$
(0.08
)
$
0.00
Weighted average shares outstanding:
Basic
169,095
168,184
168,890
168,162
Diluted
169,095
170,659
168,890
168,162
Krispy Kreme, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
As of
(Unaudited) June 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
28,625
$
38,185
Restricted cash
483
429
Accounts receivable, net
57,348
59,362
Inventories
39,461
34,716
Taxes receivable
18,143
15,526
Prepaid expense and other current assets
24,110
25,363
Total current assets
168,170
173,581
Property and equipment, net
551,406
538,220
Goodwill
1,096,249
1,101,939
Other intangible assets, net
927,714
946,349
Operating lease right of use asset, net
456,124
456,964
Other assets
23,823
23,539
Total assets
$
3,223,486
$
3,240,592
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt
$
59,827
$
54,631
Current operating lease liabilities
54,937
50,365
Accounts payable
135,197
156,488
Accrued liabilities
114,269
134,005
Structured payables
129,344
130,104
Total current liabilities
493,574
525,593
Long-term debt, less current portion
894,979
836,615
Noncurrent operating lease liabilities
453,338
454,583
Deferred income taxes, net
115,800
123,925
Other long-term obligations and deferred credits
36,538
36,093
Total liabilities
1,994,229
1,976,809
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 300,000 shares authorized as of both June 30, 2024 and December 31, 2023; 169,357 and 168,628 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
1,694
1,686
Additional paid-in capital
1,453,944
1,443,591
Shareholder note receivable
(2,865
)
(3,850
)
Accumulated other comprehensive (loss)/income, net of income tax
(12,594
)
7,246
Retained deficit
(304,840
)
(278,990
)
Total shareholders’ equity attributable to Krispy Kreme, Inc.
1,135,339
1,169,683
Noncontrolling interest
93,918
94,100
Total shareholders’ equity
1,229,257
1,263,783
Total liabilities and shareholders’ equity
$
3,223,486
$
3,240,592
Krispy Kreme, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Two Quarters Ended
June 30, 2024 (26 weeks)
July 2, 2023 (26 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income
$
(11,594
)
$
1,728
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization expense
68,186
57,135
Deferred and other income taxes
(5,338
)
(11,743
)
Loss on extinguishment of debt
—
472
Impairment and lease termination charges
448
7,808
Gain on disposal of property and equipment
(3
)
(151
)
Gain on sale-leaseback
—
(9,646
)
Share-based compensation
14,634
10,369
Change in accounts and notes receivable allowances
327
372
Inventory write-off
1,038
10,244
Settlement of interest rate swap derivatives
—
7,657
Amortization related to settlement of interest rate swap derivatives
(5,910
)
(4,379
)
Other
858
996
Change in operating assets and liabilities, excluding foreign currency translation adjustments
(47,121
)
(24,609
)
Net cash provided by operating activities
15,525
46,253
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Purchase of property and equipment
(60,735
)
(54,290
)
Proceeds from sale-leaseback
—
10,025
Purchase of equity method investment
(3,506
)
—
Disbursement for loan receivable
(1,086
)
—
Other investing activities
166
163
Net cash used for investing activities
(65,161
)
(44,102
)
CASH FLOWS FROM/(USED FOR) FINANCING ACTIVITIES:
Proceeds from the issuance of debt
365,000
989,198
Repayment of long-term debt and lease obligations
(306,797
)
(916,580
)
Payment of financing costs
—
(5,000
)
Proceeds from structured payables
190,162
73,939
Payments on structured payables
(190,811
)
(126,920
)
Capital contribution by shareholders, net of loans issued
919
631
Distribution to shareholders
(11,807
)
(11,771
)
Payments for repurchase and retirement of common stock
(4,275
)
(147
)
Distribution to noncontrolling interest
(2,146
)
(11,246
)
Net cash provided by/(used for) financing activities
40,245
(7,896
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(115
)
(3,011
)
Net decrease in cash, cash equivalents and restricted cash
(9,506
)
(8,756
)
Cash, cash equivalents and restricted cash at beginning of period
38,614
35,730
Cash, cash equivalents and restricted cash at end of period
$
29,108
$
26,974
Net cash provided by operating activities
$
15,525
$
46,253
Less: Purchase of property and equipment
(60,735
)
(54,290
)
Free cash flow
$
(45,210
)
$
(8,037
)
Krispy Kreme, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) (in thousands, except per share amounts)
We define “Adjusted EBITDA” as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, and other certain non-recurring, infrequent or non-core income and expense items. Adjusted EBITDA is a principal metric that management uses to monitor and evaluate operating performance and provides a consistent benchmark for comparison across reporting periods.
We define “Adjusted Net Income, Diluted” as net loss attributable to common shareholders, adjusted for interest expense, share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, the tax impact of adjustments, and other certain non-recurring, infrequent or non-core income and expense items. “Adjusted EPS” is Adjusted Net Income, Diluted converted to a per share amount.
Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS have certain limitations, including adjustments for income and expense items that are required by GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses that are the same as or similar to some of the adjustments in this presentation, such as share-based compensation. Our presentation of Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS supplementally.
Quarter Ended
Two Quarters Ended
(in thousands)
June 30, 2024
July 2, 2023
June 30, 2024
July 2, 2023
Net (loss)/income
$
(4,931
)
$
84
$
(11,594
)
$
1,728
Interest expense, net
14,452
12,063
28,188
24,051
Income tax (benefit)/expense
(3,611
)
(7,563
)
651
(7,246
)
Depreciation and amortization expense
34,600
29,196
68,186
57,135
Share-based compensation
7,648
4,824
14,634
10,369
Employer payroll taxes related to share-based compensation
207
189
250
214
Other non-operating expense, net (1)
949
1,061
1,522
2,060
Strategic initiatives (2)
4,187
4,477
9,008
17,946
Acquisition and integration expenses (3)
851
339
1,099
430
New market penetration expenses (4)
572
241
1,038
335
Shop closure expenses, net (5)
628
1,484
767
805
Restructuring and severance expenses (6)
132
1,667
138
2,247
Gain on sale-leaseback
—
15
—
(9,646
)
Other (7)
(958
)
737
(973
)
3,314
Adjusted EBITDA
$
54,726
$
48,814
$
112,914
$
103,742
Quarter Ended
Two Quarters Ended
(in thousands)
June 30, 2024
July 2, 2023
June 30, 2024
July 2, 2023
Segment Adjusted EBITDA:
U.S.
$
32,668
$
28,085
$
75,284
$
66,620
International
21,655
24,702
42,191
43,684
Market Development
12,875
10,495
24,775
22,046
Corporate
(12,472
)
(14,468
)
(29,336
)
(28,608
)
Total Adjusted EBITDA
$
54,726
$
48,814
$
112,914
$
103,742
Quarter Ended
Two Quarters Ended
(in thousands, except per share amounts)
June 30, 2024
July 2, 2023
June 30, 2024
July 2, 2023
Net (loss)/income
$
(4,931
)
$
84
$
(11,594
)
$
1,728
Share-based compensation
7,648
4,824
14,634
10,369
Employer payroll taxes related to share-based compensation
207
189
250
214
Other non-operating expense, net (1)
949
1,061
1,522
2,060
Strategic initiatives (2)
4,187
4,477
9,008
17,946
Acquisition and integration expenses (3)
851
339
1,099
430
New market penetration expenses (4)
572
241
1,038
335
Shop closure expenses (5)
628
1,484
767
805
Restructuring and severance expenses (6)
132
1,667
138
2,247
Gain on sale-leaseback
—
15
—
(9,646
)
Other (7)
(958
)
737
(973
)
3,314
Amortization of acquisition related intangibles (8)
7,397
7,368
14,817
14,641
Loss on extinguishment of 2019 Facility (9)
—
—
—
472
Tax impact of adjustments (10)
(6,777
)
(9,464
)
(7,001
)
(14,120
)
Tax specific adjustments (11)
(226
)
(1,758
)
(815
)
(2,315
)
Net (income)/loss attributable to noncontrolling interest
(560
)
139
(2,431
)
(1,806
)
Adjusted net income attributable to common shareholders - Basic
$
9,119
$
11,403
$
20,459
$
26,674
Additional income attributed to noncontrolling interest due to subsidiary potential common shares
(11
)
(4
)
(30
)
(7
)
Adjusted net income attributable to common shareholders - Diluted
$
9,108
$
11,399
$
20,429
$
26,667
Basic weighted average common shares outstanding
169,095
168,184
168,890
168,162
Dilutive effect of outstanding common stock options, RSUs, and PSUs
2,397
2,475
2,442
2,163
Diluted weighted average common shares outstanding
171,492
170,659
171,332
170,325
Adjusted net income per share attributable to common shareholders:
Basic
$
0.05
$
0.07
$
0.12
$
0.16
Diluted
$
0.05
$
0.07
$
0.12
$
0.16
(1)
Primarily foreign translation gains and losses in each period.
(2)
The quarter and two quarters ended June 30, 2024 consist primarily of costs associated with global transformation, exploring strategic alternatives for the Insomnia Cookies business, and preparing for the McDonald’s U.S. expansion (with these three specific initiatives aggregating to approximately $3.9 million and $8.5 million for the quarter and two quarters ended June 30, 2024, respectively). The quarter and two quarters ended July 2, 2023 consists primarily of costs associated with the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs.
(3)
Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period.
(4)
Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including Brazil, Spain, and the Insomnia Cookies brand entering Canada and the U.K.
(5)
Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment.
(6)
The quarter and two quarters ended June 30, 2024 and July 2, 2023 consist primarily of costs associated with restructuring of the global executive team.
(7)
The quarter and two quarters ended June 30, 2024 consist primarily of a gain from insurance proceeds received related to a shop in the U.S. that was destroyed and subsequently rebuilt. The quarter and two quarters ended July 2, 2023 consist primarily of legal and other regulatory expenses incurred outside the ordinary course of business.
(8)
Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the Condensed Consolidated Statements of Operations.
(9)
Includes interest expenses related to unamortized debt issuance costs from the 2019 Facility associated with extinguished lenders as a result of the March 2023 debt refinancing.
(10)
Tax impact of adjustments calculated applying the applicable statutory rates. The quarter and two quarters ended June 30, 2024 and July 2, 2023 also include the impact of disallowed executive compensation expense.
(11)
The quarter and two quarters ended June 30, 2024 consist of the recognition of previously unrecognized tax benefits unrelated to ongoing operations, a discrete tax benefit unrelated to ongoing operations, and the effect of various tax law changes on existing temporary differences. The quarter and two quarters ended July 2, 2023 consist of the recognition of a previously unrecognized tax benefit unrelated to ongoing operations, the effect of tax law changes on existing temporary differences, and a discrete tax benefit unrelated to ongoing operations.
Krispy Kreme, Inc.
Segment Reporting (Unaudited)
(in thousands, except percentages or otherwise stated)
Quarter Ended
Two Quarters Ended
June 30, 2024
July 2, 2023
June 30, 2024
July 2, 2023
Net revenues:
U.S.
$
289,304
$
267,417
$
585,239
$
548,761
International
125,269
120,588
250,019
232,576
Market Development
24,236
20,877
46,249
46,495
Total net revenues
$
438,809
$
408,882
$
881,507
$
827,832
Q2 2024 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market
Development
Total Company
Total net revenues in second quarter of fiscal 2024
$
289,304
$
125,269
$
24,236
$
438,809
Total net revenues in second quarter of fiscal 2023
267,417
120,588
20,877
408,882
Total Net Revenues Growth
21,887
4,681
3,359
29,927
Total Net Revenues Growth %
8.2
%
3.9
%
16.1
%
7.3
%
Less: Impact of shop optimization program closures
(147
)
—
—
(147
)
Less: Impact of Branded Sweet Treats exit
(486
)
—
—
(486
)
Adjusted net revenues in second quarter of fiscal 2023
266,784
120,588
20,877
408,249
Adjusted net revenue growth
22,520
4,681
3,359
30,560
Impact of foreign currency translation
—
1,404
—
1,404
Organic Revenue Growth
$
22,520
$
6,085
$
3,359
$
31,964
Organic Revenue Growth %
8.4
%
5.0
%
16.1
%
7.8
%
Q2 2024 Organic Revenue - YTD
(in thousands, except percentages)
U.S.
International
Market
Development
Total Company
Total net revenues in first two quarters of fiscal 2024
$
585,239
$
250,019
$
46,249
$
881,507
Total net revenues in first two quarters of fiscal 2023
548,761
232,576
46,495
827,832
Total Net Revenues Growth
36,478
17,443
(246
)
53,675
Total Net Revenues Growth %
6.6
%
7.5
%
-0.5
%
6.5
%
Less: Impact of shop optimization program closures
(463
)
—
—
(463
)
Less: Impact of Branded Sweet Treats exit
(5,853
)
—
—
(5,853
)
Adjusted net revenues in first two quarters of fiscal 2023
542,445
232,576
46,495
821,516
Adjusted net revenue growth
42,794
17,443
(246
)
59,991
Impact of foreign currency translation
—
(432
)
—
(432
)
Organic Revenue Growth
$
42,794
$
17,011
$
(246
)
$
59,559
Organic Revenue Growth %
7.9
%
7.3
%
-0.5
%
7.2
%
Q2 2023 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market
Development
Total Company
Total net revenues in second quarter of fiscal 2023
$
267,417
$
120,588
$
20,877
$
408,882
Total net revenues in second quarter of fiscal 2022
244,665
110,558
20,022
375,245
Total Net Revenues Growth
22,752
10,030
855
33,637
Total Net Revenues Growth %
9.3
%
9.1
%
4.3
%
9.0
%
Less: Impact of shop optimization program closures
(3,330
)
—
—
(3,330
)
Less: Impact of Branded Sweet Treats exit
(6,701
)
—
—
(6,701
)
Adjusted net revenues in second quarter of fiscal 2022
234,634
110,558
20,022
365,214
Adjusted net revenue growth
32,783
10,030
855
43,668
Impact of acquisitions
(3,023
)
—
877
(2,146
)
Impact of foreign currency translation
—
15
—
15
Organic Revenue Growth
$
29,760
$
10,045
$
1,732
$
41,537
Organic Revenue Growth %
12.7
%
9.1
%
8.7
%
11.4
%
Q2 2023 Organic Revenue - YTD
(in thousands, except percentages)
U.S.
International
Market
Development
Total Company
Total net revenues in first two quarters of fiscal 2023
$
548,761
$
232,576
$
46,495
$
827,832
Total net revenues in first two quarters of fiscal 2022
492,584
215,051
40,142
747,777
Total Net Revenues Growth
56,177
17,525
6,353
80,055
Total Net Revenues Growth %
11.4
%
8.1
%
15.8
%
10.7
%
Less: Impact of shop optimization program closures
(6,517
)
—
—
(6,517
)
Less: Impact of Branded Sweet Treats exit
(6,701
)
—
—
(6,701
)
Adjusted net revenues in first two quarters of fiscal 2022
479,366
215,051
40,142
734,559
Adjusted net revenue growth
69,395
17,525
6,353
93,273
Impact of acquisitions
(6,103
)
—
1,770
(4,333
)
Impact of foreign currency translation
—
5,794
—
5,794
Organic Revenue Growth
$
63,292
$
23,319
$
8,123
$
94,734
Organic Revenue Growth %
13.2
%
10.8
%
20.2
%
12.9
%
Trailing Four
Quarters Ended
Fiscal Year Ended
(in thousands, unless otherwise stated)
June 30, 2024
December 31,
2023
January 1, 2023
U.S.:
Revenues
$
1,141,422
$
1,104,944
$
1,010,250
Non-Fresh Revenues (1)
(3,760
)
(9,416
)
(38,380
)
Fresh Revenues from Insomnia Cookies and Hubs without Spokes (2)
(400,618
)
(399,061
)
(404,430
)
Sales from Hubs with Spokes
737,044
696,467
567,440
Sales per Hub (millions)
5.0
4.9
4.5
International:
Sales from Hubs with Spokes (3)
$
507,074
$
489,631
$
435,651
Sales per Hub (millions) (4)
10.1
10.0
9.7
(1)
Includes the exited Branded Sweet Treats business revenues.
(2)
Includes Insomnia Cookies revenues and Fresh Revenues generated by Hubs without Spokes.
(3)
Total International net revenues is equal to Fresh Revenues from Hubs with Spokes for that business segment.
(4)
International sales per Hub comparative data has been restated in constant currency based on current exchange rates.
Krispy Kreme, Inc.
Global Points of Access (Unaudited)
Global Points of Access
Quarter Ended
Fiscal Year
Ended
June 30, 2024
July 2, 2023
December 31,
2023
U.S.:
Hot Light Theater Shops
229
228
229
Fresh Shops
70
66
70
Cookie Bakeries
286
244
267
DFD Doors (2)
7,497
6,320
6,808
Total
8,082
6,858
7,374
International:
Hot Light Theater Shops
46
44
44
Fresh Shops
502
466
483
Carts, Food Trucks, and Other (1)
18
16
16
DFD Doors
4,871
3,396
3,977
Total
5,437
3,922
4,520
Market Development:
Hot Light Theater Shops
117
111
116
Fresh Shops
1,033
873
968
Carts, Food Trucks, and Other (1)
30
28
30
DFD Doors
1,154
1,080
1,139
Total
2,334
2,092
2,253
Total Global Points of Access (as defined)
15,853
12,872
14,147
Total Hot Light Theater Shops
392
383
389
Total Fresh Shops
1,605
1,405
1,521
Total Cookie Bakeries
286
244
267
Total Shops
2,283
2,032
2,177
Total Carts, Food Trucks, and Other
48
44
46
Total DFD Doors
13,522
10,796
11,924
Total Global Points of Access (as defined)
15,853
12,872
14,147
(1)
Carts and Food Trucks are non-producing, mobile (typically on wheels) facilities without walls or a door where product is received from a Hot Light Theater Shop or Doughnut Factory. Other includes a vending machine. Points of Access in this category are primarily found in international locations in airports, train stations, etc.
(2)
Includes over 160 McDonald’s shops located in Louisville and Lexington, Kentucky and the surrounding area as of June 30, 2024.
Krispy Kreme, Inc.
Global Hubs (Unaudited)
Hubs
Quarter Ended
Fiscal Year
Ended
June 30, 2024
July 2, 2023
December 31,
2023
U.S.:
Hot Light Theater Shops (1)
222
221
220
Doughnut Factories
5
4
4
Total
227
225
224
Hubs with Spokes
151
143
149
Hubs without Spokes
76
82
75
International:
Hot Light Theater Shops (1)
37
35
36
Doughnut Factories
14
14
14
Total
51
49
50
Hubs with Spokes
51
49
50
Market Development:
Hot Light Theater Shops (1)
115
108
112
Doughnut Factories
26
23
23
Total
141
131
135
Total Hubs
419
405
409
(1)
Includes only Hot Light Theater Shops and excludes Mini Theaters. A Mini Theater is a Spoke location that produces some doughnuts for itself and also receives doughnuts from another producing location.
Krispy Kreme, Inc.
Net Debt and Leverage (Unaudited)
(in thousands, except leverage ratio)
June 30, 2024
December 31,
2023
Current portion of long-term debt
$
59,827
$
54,631
Long-term debt, less current portion
894,979
836,615
Total long-term debt, including debt issuance costs
954,806
891,246
Add back: Debt issuance costs
3,847
4,371
Total long-term debt, excluding debt issuance costs
958,653
895,617
Less: Cash and cash equivalents
(28,625
)
(38,185
)
Net debt
$
930,028
$
857,432
Adjusted EBITDA - trailing four quarters
220,796
211,624
Net leverage ratio
4.2 x
4.1 x
View source version on businesswire.com: https://www.businesswire.com/news/home/20240807359325/en/
Investor Relations ir@krispykreme.com
Financial Media Edelman Smithfield for Krispy Kreme, Inc. Ashley Firlan & Ashna Vasa KrispyKremeIR@edelman.com
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