First quarter Net Revenue grows 5.7%,
Organic Revenue increases 6.7%
Delivered Fresh Daily expansion to
accelerate with McDonald’s nationwide rollout
Krispy Kreme, Inc. (NASDAQ: DNUT) (“Krispy Kreme”, “KKI”, or the
“Company”) today reported financial results for the quarter ended
March 31, 2024.
First Quarter Highlights (vs Q1
2023)
- Net revenue grew 5.7% to $442.7 million
- Organic revenue grew 6.7% to $440.9 million
- GAAP net loss of $6.7 million
- GAAP net loss attributable to KKI of $8.5 million
- Adjusted EBITDA grew 5.9% to $58.2 million
- Global Points of Access increased 2,404, or 19.4% to
14,814
“First-quarter results exceeded our expectations, driven by
increased digital sales and strong consumer demand, highlighted by
a record setting Valentine’s Day with specialty doughnuts available
in 33 countries around the world,” said Josh Charlesworth, CEO.
“Our strategy of making fresh Krispy Kreme doughnuts more
available globally is providing impressive results,” continued
Charlesworth. “We are modernizing how we make and move doughnuts to
ensure high quality, profitable growth. Our Delivered Fresh Daily
expansion is accelerating into more grocers, convenience stores and
quick service restaurants. We’re excited about our recently
announced agreement with McDonald’s, which is expected to more than
12,000 new points of access in the U.S. by the end of 2026. We’ll
support much of this nationwide rollout using existing capacity,
while adding distribution with other major customers as we grow,”
he said.
Financial Highlights
Quarter Ended
$ in millions, except per share data
March 31, 2024
April 2, 2023
Change
GAAP:
Net revenue
$
442.7
$
419.0
5.7%
Operating income
$
11.9
$
14.9
(20.3)%
Operating income margin
2.7
%
3.6
%
(90) bps
Net (loss)/income
$
(6.7)
$
1.6
nm
Net loss attributable to KKI
$
(8.5)
$
(0.3)
nm
Diluted loss per share
$
(0.05)
$
0.00
$
(0.05)
Non-GAAP:
Organic revenue(1)
$
440.9
$
413.3
6.7%
Adjusted net income, diluted(1)
$
11.3
$
15.3
(25.8)%
Adjusted EBITDA(1)
$
58.2
$
54.9
5.9%
Adjusted EBITDA margin(1)
13.1
%
13.1
%
nm
Adjusted diluted EPS(1)
$
0.07
$
0.09
$
(0.02)
Notes: (1) Non-GAAP figures – please
refer to Reconciliation of Non-GAAP Financial Measures.
Key Operating Metrics
Quarter Ended
$ in millions
March 31, 2024
April 2, 2023
Change
Global Points of
Access
14,814
12,410
19.4%
Sales per Hub (U.S.)
TTM
$
4.9
$
4.6
6.5%
Sales per Hub (International)
TTM
$
10.2
$
9.8
4.1%
Digital Sales as a Percent of
Retail Sales
23.0
%
19.6
%
340 bps
First Quarter 2024 Consolidated Results
(vs Q1 2023)
Krispy Kreme’s first quarter results reflect continued
year-over-year growth as the Company continued to execute upon our
omni-channel strategy. Net revenue grew 5.7% to $442.7 million,
compared to $419.0 million. GAAP net loss was $6.7 million compared
to prior year net income of $1.6 million. GAAP diluted loss per
share was $(0.05), a decline of $(0.05) from the same quarter last
year.
Total company organic revenue grew 6.7%, fueled by a 19.4%
increase in Points of Access and the success of global brand
activations including Valentine’s Day and St. Patrick’s Day
doughnuts among others. Digital sales as a percent of retail sales
increased 340 basis points to 23.0% of sales, due to a focus on
owned channel improvements and increasing product availability
through third parties.
Adjusted EBITDA in the quarter grew 5.9% to $58.2 million, with
Adjusted EBITDA margins flat at 13.1%. Adjusted Net Income, diluted
declined 25.8% to $11.3 million in the quarter. Adjusted Diluted
EPS declined to $0.07 from $0.09 in the same quarter last year,
primarily driven by increased depreciation and amortization and
interest expenses, as the Company continues to invest in global
expansion.
First Quarter 2024 Segment Results (vs
Q1 2023)
U.S.: In the U.S. segment, net revenue grew $14.6
million, or 5.2%, with organic revenue growth of 7.4%. Revenue
growth was driven by increased Points of Access (“POA”) as we
continue to accelerate our Delivered Fresh Daily strategy, combined
with successful specialty doughnut collections linked to seasonal
events. The gap between organic revenue growth and net revenue
growth was primarily attributable to the exit of the Branded Sweet
Treats business.
Sales per hub in the U.S. increased 6.5% to $4.9 million while
DFD average sales per door per week remained stable at $640.
Digital sales as a percentage of U.S. Fresh retail doughnut sales
increased 480 basis points to 19.3% benefiting from successful
marketing integrations and an expanded delivery radius.
U.S. Adjusted EBITDA increased 10.6% to $42.6 million with
Adjusted EBITDA margin expansion of 70 basis points to 14.4% tied
to labor and waste optimization and productivity benefits from the
Company’s Hub and Spoke model.
International: In the International segment, which is now
made up of all equity owned businesses including Japan and Canada,
saw net revenue grow $12.8 million, or 11.4%. International organic
revenue grew 9.8%, driven by record POA growth of 917, or nearly
24% growth, and successful marketing activations.
International Adjusted EBITDA grew 8.2% to $20.5 million with
adjusted EBITDA margin declining approximately 50 basis points, as
lower volumes in the U.K. continued to more than offset strength in
Canada and Mexico.
Market Development: In the Market Development segment,
which is now comprised of our franchise businesses both
domestically in the U.S. and internationally, net revenue and
organic revenue declined $3.6 million, or 14.1%, largely driven by
a one-off timing impact of equipment sales in the prior year.
Market Development Adjusted EBITDA grew 3.0% to $11.9 million.
Adjusted EBITDA margins expanded 900 basis points to 54.1%, due to
the timing of lower margin equipment sales and the expansion of the
Company’s Hub and Spoke model throughout international
franchises.
Balance Sheet and Capital
Expenditures
During the first quarter of 2024, the Company invested $29.1
million in capital expenditures, driven primarily by investments in
the Hub and Spoke model in preparation for the U.S. expansion of
our Delivered Fresh Daily network, information technology
investments, and continued expansion at Insomnia Cookies.
As of March 31, 2024 the Company has total available liquidity
of $133.6 million, including $33.1 million of cash and cash
equivalents as well as undrawn capacity of roughly $100.5 million
under available credit facilities. In 2023, the Company extended
maturities of its primary debt facility to 2028 and as of March 31,
2024 has total debt of $946.2 million and net debt of $913.1
million.
2024 Financial Guidance
Krispy Kreme reaffirms the following guidance for the full year
2024 (vs FY2023)
- Net Revenue growth of +5% to +7%
- Organic Revenue growth of +6% to +8%
- Adjusted EBITDA growth of +8% to +11%
- Adjusted Diluted EPS of $0.27 to $0.31
- Income Tax rate between 26% and 28%
- Capital Expenditures of 7% to 8% of net revenue
- Interest Expense, net of $55 million to $65 million
The above guidance assumes nominal impact from foreign exchange.
The Company continues to expect to reduce its net leverage in 2024,
as it makes progress towards its 2026 goal of approximately 2.0x to
2.5x net leverage.
On October 3, 2023, the Company announced it is exploring
strategic alternatives for Insomnia Cookies. Guidance for the full
year 2024 includes operations from Insomnia Cookies.
Definitions
The following definitions apply to terms used throughout this
press release:
- Global Points of Access: Reflects all locations at which
fresh doughnuts or cookies can be purchased. We define global
points of access to include all Hot Light Theater Shops, Fresh
Shops, Carts and Food Trucks, DFD Doors and Cookie Shops, at both
Company-owned and franchise locations as of the end of the
respective reporting period. We monitor global points of access as
a metric that informs the growth of our omni-channel presence over
time and believe this metric is useful to investors to understand
our footprint in each of our segments.
- Hubs: Reflects locations where fresh doughnuts are
produced and processed for sale at any point of access. We define
Hubs to include self-sustaining Hot Light Theater Shops and
Doughnut Factories, at both Company-owned and franchise locations
as of the end of the respective reporting period.
- Sales Per Hub: Sales per Hub equals Fresh Revenues from
Hubs with Spokes, divided by the average number of Hubs with Spokes
at the end of the five most recent quarters.
- Fresh Revenues from Hubs with Spokes: Fresh Revenues
include product sales generated from our Doughnut Shop business
(including digital), as well as DFD sales, but excluding sales from
Branded Sweet Treats. It also excludes all Insomnia Cookies
revenues as the measure is focused on the Krispy Kreme business.
Fresh Revenues from Hubs with Spokes equals the Fresh Revenues
derived from those Hubs currently producing product for other
shops, Carts and Food Trucks, and/or DFD doors, but excluding Fresh
Revenues derived from those Hubs not currently producing product
for other shops, Carts and Food Trucks, and/or DFD doors.
- Free Cash Flow: Defined as cash provided by operating
activities less purchases of property and equipment.
Conference Call
Krispy Kreme will host a public conference call at 8:30 AM
Eastern Time today to discuss its results for the first 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 39 countries through its unique network of fresh
doughnut shops, partnerships with leading retailers, and a rapidly
growing digital business with more than 14,000 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, 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
March 31, 2024 (13
weeks)
April 2, 2023 (13
weeks)
Net revenues
Product sales
$
433,512
$
410,674
Royalties and other revenues
9,186
8,276
Total net revenues
442,698
418,950
Product and distribution costs
107,015
117,833
Operating expenses
205,195
191,408
Selling, general and administrative
expense
71,574
61,468
Marketing expenses
12,115
9,853
Pre-opening costs
1,105
764
Other expenses/(income), net
200
(5,263)
Depreciation and amortization expense
33,586
27,939
Operating income
11,908
14,948
Interest expense, net
13,736
11,988
Other non-operating expense, net
573
999
(Loss)/income before income
taxes
(2,401)
1,961
Income tax expense
4,262
317
Net (loss)/income
(6,663)
1,644
Net income attributable to noncontrolling
interest
1,871
1,945
Net loss attributable to Krispy Kreme,
Inc
$
(8,534)
$
(301)
Net loss per share:
Common stock — Basic
$
(0.05)
$
0.00
Common stock — Diluted
$
(0.05)
$
0.00
Weighted average shares
outstanding:
Basic
168,685
168,141
Diluted
168,685
168,141
Krispy Kreme, Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except per
share data)
As of
March 31, 2024
December 31,
2023
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
33,132
$
38,185
Restricted cash
480
429
Accounts receivable, net
57,287
59,362
Inventories
39,257
34,716
Taxes receivable
18,397
15,526
Prepaid expense and other current
assets
25,461
25,363
Total current assets
174,014
173,581
Property and equipment, net
543,100
538,220
Goodwill
1,098,826
1,101,939
Other intangible assets, net
938,847
946,349
Operating lease right of use asset,
net
456,810
456,964
Other assets
22,721
23,539
Total assets
$
3,234,318
$
3,240,592
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Current portion of long-term debt
$
60,326
$
54,631
Current operating lease liabilities
50,275
50,365
Accounts payable
128,555
156,488
Accrued liabilities
117,093
134,005
Structured payables
133,809
130,104
Total current liabilities
490,058
525,593
Long-term debt, less current portion
881,778
836,615
Noncurrent operating lease liabilities
454,265
454,583
Deferred income taxes, net
123,203
123,925
Other long-term obligations and deferred
credits
37,127
36,093
Total liabilities
1,986,431
1,976,809
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 300,000
shares authorized as of both March 31, 2024 and December 31, 2023;
168,731 and 168,628 shares issued and outstanding as of March 31,
2024 and December 31, 2023, respectively
1,687
1,686
Additional paid-in capital
1,449,773
1,443,591
Shareholder note receivable
(3,629)
(3,850)
Accumulated other comprehensive
(loss)/income, net of income tax
(1,208)
7,246
Retained deficit
(293,430)
(278,990)
Total shareholders’ equity attributable
to Krispy Kreme, Inc.
1,153,193
1,169,683
Noncontrolling interest
94,694
94,100
Total shareholders’ equity
1,247,887
1,263,783
Total liabilities and shareholders’
equity
$
3,234,318
$
3,240,592
Krispy Kreme, Inc.
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Quarter Ended
March 31, 2024 (13
weeks)
April 2, 2023 (13
weeks)
CASH FLOWS (USED FOR)/FROM OPERATING
ACTIVITIES:
Net (loss)/income
$
(6,663)
$
1,644
Adjustments to reconcile net (loss)/income
to net cash (used for)/provided by operating activities:
Depreciation and amortization expense
33,586
27,939
Deferred and other income taxes
214
(219)
Loss on extinguishment of debt
—
472
Impairment and lease termination
charges
247
4,900
(Gain)/loss on disposal of property and
equipment
(49)
33
Gain on sale-leaseback
—
(9,661)
Share-based compensation
6,986
5,545
Change in accounts and notes receivable
allowances
113
334
Inventory write-off
411
7,115
Settlement of interest rate swap
derivatives
—
7,657
Amortization related to settlement of
interest rate swap derivatives
(2,955)
—
Other
788
(204)
Change in operating assets and
liabilities, excluding foreign currency translation adjustments
(50,383)
(35,190)
Net cash (used for)/provided by
operating activities
(17,705)
10,365
CASH FLOWS USED FOR INVESTING
ACTIVITIES:
Purchase of property and equipment
(29,064)
(26,553)
Proceeds from sale-leaseback
—
10,025
Other investing activities
19
82
Net cash used for investing
activities
(29,045)
(16,446)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from the issuance of debt
179,500
891,698
Repayment of long-term debt and lease
obligations
(132,343)
(852,144)
Payment of financing costs
—
(5,000)
Proceeds from structured payables
101,287
44,757
Payments on structured payables
(97,416)
(70,480)
Capital contribution by shareholders, net
of loans issued
232
—
Distribution to shareholders
(5,902)
(5,884)
Payments for repurchase and retirement of
common stock
(804)
—
Distribution to noncontrolling
interest
(977)
(1,139)
Net cash provided by financing
activities
43,577
1,808
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(1,829)
(1,373)
Net decrease in cash, cash equivalents and
restricted cash
(5,002)
(5,646)
Cash, cash equivalents and restricted cash
at beginning of period
38,614
35,730
Cash, cash equivalents and restricted
cash at end of period
$
33,612
$
30,084
Net cash (used for)/provided by operating
activities
$
(17,705)
$
10,365
Less: Purchase of property and
equipment
(29,064)
(26,553)
Free cash flow
$
(46,769)
$
(16,188)
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
(in thousands)
March 31, 2024
April 2, 2023
Net (loss)/income
$
(6,663)
$
1,644
Interest expense, net
13,736
11,988
Income tax expense
4,262
317
Depreciation and amortization expense
33,586
27,939
Share-based compensation
6,986
5,545
Employer payroll taxes related to
share-based compensation
43
25
Other non-operating expense, net (1)
573
999
Strategic initiatives (2)
4,821
13,469
Acquisition and integration expenses
(3)
248
91
New market penetration expenses (4)
466
94
Shop closure expenses/(income), net
(5)
139
(679)
Restructuring and severance expenses
(6)
6
580
Gain on sale-leaseback
—
(9,661)
Other (7)
(15)
2,577
Adjusted EBITDA
$
58,188
$
54,928
Quarter Ended
(in thousands)
March 31, 2024
April 2, 2023
Segment Adjusted EBITDA:
U.S
$
42,616
$
38,535
International
20,536
18,982
Market Development
11,900
11,551
Corporate
(16,864)
(14,140)
Total Adjusted EBITDA
$
58,188
$
54,928
Quarter Ended
(in thousands, except per share
amounts)
March 31, 2024
April 2, 2023
Net (loss)/income
$
(6,663)
$
1,644
Share-based compensation
6,986
5,545
Employer payroll taxes related to
share-based compensation
43
25
Other non-operating expense, net (1)
573
999
Strategic initiatives (2)
4,821
13,469
Acquisition and integration expenses
(3)
248
91
New market penetration expenses (4)
466
94
Shop closure expenses/(income), net
(5)
139
(679)
Restructuring and severance expenses
(6)
6
580
Gain on sale-leaseback
—
(9,661)
Other (7)
(15)
2,577
Amortization of acquisition related
intangibles (8)
7,420
7,273
Loss on extinguishment of 2019 Facility
(9)
—
472
Tax impact of adjustments (10)
(224)
(4,656)
Tax specific adjustments (11)
(589)
(557)
Net income attributable to noncontrolling
interest
(1,871)
(1,945)
Adjusted net income attributable to
common shareholders - Basic
$
11,340
$
15,271
Additional income attributed to
noncontrolling interest due to subsidiary potential common
shares
(19)
(10)
Adjusted net income attributable to
common shareholders - Diluted
$
11,321
$
15,261
Basic weighted average common shares
outstanding
168,685
168,141
Dilutive effect of outstanding common
stock options, RSUs, and PSUs
2,488
1,850
Diluted weighted average common shares
outstanding
171,173
169,991
Adjusted net income per share
attributable to common shareholders:
Basic
$
0.07
$
0.09
Diluted
$
0.07
$
0.09
(1) Primarily foreign translation gains
and losses in each period.
(2) The quarter ended March 31, 2024
consists 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
specific initiatives aggregating to approximately $4.6 million of
the total). The quarter ended April 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
(approximately $13.4 million of the total).
(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 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. The quarter ended April 2, 2023 includes gains related
to the termination of leases at certain Krispy Kreme shops in the
U.S. where the Company had already recognized impairment of the
corresponding right of use assets in a prior period.
(6) The quarter ended April 2, 2023
consists primarily of costs associated with restructuring of the
global executive team.
(7) The quarters ended March 31, 2024 and
April 2, 2023 consist primarily of legal and other regulatory
expenses incurred outside the ordinary course of business. The
regulatory expenses incurred in the quarter ended April 2, 2023
relate to previous business acquisitions.
(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 quarters ended March
31, 2024 and April 2, 2023 also include the impact of disallowed
executive compensation expense.
(11) The quarter ended March 31, 2024
consists of the recognition of a previously unrecognized tax
benefit unrelated to ongoing operations and a discrete tax benefit
unrelated to ongoing operations. The quarter ended April 2, 2023
consists of a discrete tax benefit unrelated to ongoing
operations.
Krispy Kreme, Inc.
Segment Reporting
(Unaudited)
(in thousands, except
percentages or otherwise stated)
Quarter Ended
March 31, 2024
April 2, 2023
Net revenues:
U.S.
$
295,935
$
281,344
International
124,750
111,988
Market Development
22,013
25,618
Total net revenues
$
442,698
$
418,950
Q1 2024 Organic Revenue - QTD
(in thousands, except
percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first quarter of
fiscal 2024
$
295,935
$
124,750
$
22,013
$
442,698
Total net revenues in first quarter of
fiscal 2023
281,344
111,988
25,618
418,950
Total Net Revenues Growth
14,591
12,762
(3,605)
23,748
Total Net Revenues Growth %
5.2 %
11.4 %
-14.1 %
5.7 %
Less: Impact of shop optimization program
closures
(316)
—
—
(316)
Less: Impact of Branded Sweet Treats
exit
(5,367)
—
—
(5,367)
Adjusted net revenues in first quarter of
fiscal 2023
275,661
111,988
25,618
413,267
Adjusted net revenue growth
20,274
12,762
(3,605)
29,431
Impact of foreign currency translation
—
(1,836)
—
(1,836)
Organic Revenue Growth
$
20,274
$
10,926
$
(3,605)
$
27,595
Organic Revenue Growth %
7.4 %
9.8 %
-14.1 %
6.7 %
Q1 2023 Organic Revenue - QTD
(in thousands, except
percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first quarter of
fiscal 2023
$
281,344
$
111,988
$
25,618
$
418,950
Total net revenues in first quarter of
fiscal 2022
247,919
104,493
20,120
372,532
Total Net Revenues Growth
33,425
7,495
5,498
46,418
Total Net Revenues Growth %
13.5 %
7.2 %
27.3 %
12.5 %
Less: Impact of shop optimization
closures
(3,187)
—
—
(3,187)
Adjusted net revenues in first quarter of
fiscal 2022
244,732
104,493
20,120
369,345
Adjusted net revenue growth
36,612
7,495
5,498
49,605
Impact of acquisitions
(3,080)
—
893
(2,187)
Impact of foreign currency translation
—
5,779
—
5,779
Organic Revenue Growth
$
33,532
$
13,274
$
6,391
$
53,197
Organic Revenue Growth %
13.7 %
12.7 %
31.8 %
14.4 %
Trailing Four Quarters
Ended
Fiscal Years Ended
Sales per Hub
(in thousands, unless otherwise
stated)
March 31, 2024
December 31, 2023
January 1, 2023
U.S.:
Revenues
$
1,119,535
$
1,104,944
$
1,010,250
Non-Fresh Revenues (1)
(4,003)
(9,416)
(38,380)
Fresh Revenues from Insomnia Cookies and
Hubs without Spokes (2)
(395,102)
(399,061)
(404,430)
Sales from Hubs with Spokes
720,430
696,467
567,440
Sales per Hub (millions)
4.9
4.9
4.5
International:
Sales from Hubs with Spokes (3)
$
502,393
$
489,631
$
435,651
Sales per Hub (millions) (4)
10.2
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
March 31, 2024
April 2, 2023
December 31, 2023
U.S.:
Hot Light Theater Shops
229
228
229
Fresh Shops
71
67
70
Cookie Bakeries
277
239
267
DFD Doors (2)
7,198
6,081
6,808
Total
7,775
6,615
7,374
International:
Hot Light Theater Shops
45
43
44
Fresh Shops
490
458
483
Carts, Food Trucks, and Other (1)
16
16
16
DFD Doors
4,202
3,319
3,977
Total
4,753
3,836
4,520
Market Development:
Hot Light Theater Shops
117
106
116
Fresh Shops
1,010
835
968
Carts, Food Trucks, and Other (1)
30
28
30
DFD Doors
1,129
990
1,139
Total
2,286
1,959
2,253
Total Global Points of Access (as
defined)
14,814
12,410
14,147
Total Hot Light Theater Shops
391
377
389
Total Fresh Shops
1,571
1,360
1,521
Total Cookie Bakeries
277
239
267
Total Shops
2,239
1,976
2,177
Total Carts, Food Trucks, and
Other
46
44
46
Total DFD Doors
12,529
10,390
11,924
Total Global Points of Access (as
defined)
14,814
12,410
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 March 31, 2024.
Krispy Kreme, Inc.
Global Hubs
(Unaudited)
Hubs
Quarter Ended
Fiscal Year Ended
March 31, 2024
April 2, 2023
December 31, 2023
U.S.:
Hot Light Theater Shops (1)
221
221
220
Doughnut Factories
4
4
4
Total
225
225
224
Hubs with Spokes
154
137
149
Hubs without Spokes
71
88
75
International:
Hot Light Theater Shops (1)
36
34
36
Doughnut Factories
14
14
14
Total
50
48
50
Hubs with Spokes
50
48
50
Market Development:
Hot Light Theater Shops (1)
113
103
112
Doughnut Factories
26
24
23
Total
139
127
135
Total Hubs
414
400
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)
March 31, 2024
December 31, 2023
Current portion of long-term debt
$
60,326
$
54,631
Long-term debt, less current portion
881,778
836,615
Total long-term debt, including debt
issuance costs
942,104
891,246
Add back: Debt issuance costs
4,109
4,371
Total long-term debt, excluding debt
issuance costs
946,213
895,617
Less: Cash and cash equivalents
(33,132)
(38,185)
Net debt
$
913,081
$
857,432
Adjusted EBITDA - trailing four
quarters
214,884
211,624
Net leverage ratio
4.2 x
4.1 x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508782727/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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