0001857154false00018571542024-08-082024-08-08


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________

FORM 8-K
_________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

August 8, 2024
Date of Report (Date of earliest event reported)
_________________________

Image_0.jpg
Krispy Kreme, Inc.
(Exact name of registrant as specified in its charter)
_________________________

Delaware001-4057337-1701311
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
2116 Hawkins Street, Charlotte, North Carolina 28203
(Address of principal executive offices)

(800) 457-4779
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)
_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-14(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.01 par value per share
DNUT
NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition.
The information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
On August 8, 2024, Krispy Kreme, Inc. (the "Company") issued a press release announcing the Company's financial results for the second quarter ended June 30, 2024. A copy of such press release is attached as Exhibit 99.1 and is also available on the Company’s website at investors.krispykreme.com.
Item 9.01. Financial Statements and Exhibits.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

KRISPY KREME, INC.

Dated: August 8, 2024

By:    /s/ Jeremiah Ashukian
Name:Jeremiah Ashukian
Title:Chief Financial Officer

EXHIBIT 99.1

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Krispy Kreme reports second quarter 2024 financial results
Second quarter Net Revenue grows 7.3%, Organic Revenue increases 7.8%
Updated 2024 guidance reflects sale of majority stake in Insomnia Cookies
CHARLOTTE, NC (August 8, 2024) – 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)
•Net revenue grew 7.3% to $438.8 million
•Organic revenue grew 7.8% to $440.2 million
•GAAP net loss of $4.9 million ($5.5 million net loss attributable to KKI)
•Adjusted EBITDA grew 12.1% to $54.7 million, Adjusted EBITDA margin up 60 basis points year-over-year
•GAAP operating cash flow of $33.2 million
•Global Points of Access (“POA”) increased 2,981, or 23.2%, to 15,853

“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 dataJune 30, 2024July 2, 2023Change
GAAP:
  Net revenue$438.8 $408.9 7.3 %
  Operating income$6.9 $5.6 21.5 %
  Operating income margin1.6 %1.4 %20 bps
  Net (loss)/income$(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 margin12.5 %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 millionsJune 30, 2024July 2, 2023Change
Global Points of Access15,853 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 Sales22.2 %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 DFD 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 $33.2 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.
•Net Revenue of $1,650 to $1,685 million
•Organic Revenue growth of +5% to +7%
•Adjusted EBITDA of $215 to $220 million


•Adjusted Diluted EPS of $0.24 to $0.28
•Income Tax rate between 28% and 30%
•Capital Expenditures of 7% to 8% of net revenue
•Interest Expense, net of $55 million to $60 million
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:
•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 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.
Investor Relations
ir@krispykreme.com
Financial Media
Edelman Smithfield for Krispy Kreme, Inc.
Ashley Firlan & Ashna Vasa
KrispyKremeIR@edelman.com
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 EndedTwo 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 $811,022 
Royalties and other revenues9,398 8,534 18,584 16,810 
Total net revenues438,809 408,882 881,507 827,832 
Product and distribution costs107,846 111,106 214,861 228,939 
Operating expenses212,504 189,165 417,699 380,573 
Selling, general and administrative expense64,466 62,582 136,040 124,050 
Marketing expenses12,416 9,770 24,531 19,623 
Pre-opening costs967 1,104 2,072 1,868 
Other (income)/expenses, net(849)314 (649)(4,949)
Depreciation and amortization expense34,600 29,196 68,186 57,135 
Operating income6,859 5,645 18,767 20,593 
Interest expense, net14,452 12,063 28,188 24,051 
Other non-operating expense, net949 1,061 1,522 2,060 
Loss before income taxes(8,542)(7,479)(10,943)(5,518)
Income tax (benefit)/expense(3,611)(7,563)651 (7,246)
Net (loss)/income(4,931)84 (11,594)1,728 
Net income/(loss) attributable to noncontrolling interest560 (139)2,431 1,806 
Net (loss)/income attributable to Krispy Kreme, Inc.$(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:
Basic169,095 168,184 168,890 168,162 
Diluted169,095 170,659 168,890 168,162 


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 cash483 429 
Accounts receivable, net57,348 59,362 
Inventories39,461 34,716 
Taxes receivable18,143 15,526 
Prepaid expense and other current assets24,110 25,363 
Total current assets168,170 173,581 
Property and equipment, net551,406 538,220 
Goodwill1,096,249 1,101,939 
Other intangible assets, net927,714 946,349 
Operating lease right of use asset, net456,124 456,964 
Other assets23,823 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 liabilities54,937 50,365 
Accounts payable135,197 156,488 
Accrued liabilities114,269 134,005 
Structured payables129,344 130,104 
Total current liabilities493,574 525,593 
Long-term debt, less current portion894,979 836,615 
Noncurrent operating lease liabilities453,338 454,583 
Deferred income taxes, net115,800 123,925 
Other long-term obligations and deferred credits36,538 36,093 
Total liabilities1,994,229 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 capital1,453,944 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 interest93,918 94,100 
Total shareholders’ equity1,229,257 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 expense68,186 57,135 
Deferred and other income taxes(5,338)(11,743)
Loss on extinguishment of debt— 472 
Impairment and lease termination charges448 7,808 
Gain on disposal of property and equipment(3)(151)
Gain on sale-leaseback— (9,646)
Share-based compensation14,634 10,369 
Change in accounts and notes receivable allowances327 372 
Inventory write-off1,038 10,244 
Settlement of interest rate swap derivatives— 7,657 
Amortization related to settlement of interest rate swap derivatives(5,910)(4,379)
Other858 996 
Change in operating assets and liabilities, excluding foreign currency translation adjustments(47,121)(24,609)
Net cash provided by operating activities15,525 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 activities166 163 
Net cash used for investing activities(65,161)(44,102)
CASH FLOWS FROM/(USED FOR) FINANCING ACTIVITIES:
Proceeds from the issuance of debt365,000 989,198 
Repayment of long-term debt and lease obligations(306,797)(916,580)
Payment of financing costs— (5,000)
Proceeds from structured payables190,162 73,939 
Payments on structured payables(190,811)(126,920)
Capital contribution by shareholders, net of loans issued919 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 activities40,245 (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 period38,614 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, 2024July 2, 2023June 30, 2024July 2, 2023
Net (loss)/income$(4,931)$84 $(11,594)$1,728 
Interest expense, net14,452 12,063 28,188 24,051 
Income tax (benefit)/expense(3,611)(7,563)651 (7,246)
Depreciation and amortization expense34,600 29,196 68,186 57,135 
Share-based compensation7,648 4,824 14,634 10,369 
Employer payroll taxes related to share-based compensation207 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, 2024July 2, 2023June 30, 2024July 2, 2023
Segment Adjusted EBITDA:
U.S.$32,668 $28,085 $75,284 $66,620 
International21,655 24,702 42,191 43,684 
Market Development12,875 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, 2024July 2, 2023June 30, 2024July 2, 2023
Net (loss)/income$(4,931)$84 $(11,594)$1,728 
Share-based compensation7,648 4,824 14,634 10,369 
Employer payroll taxes related to share-based compensation207 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 outstanding169,095 168,184 168,890 168,162 
Dilutive effect of outstanding common stock options, RSUs, and PSUs2,397 2,475 2,442 2,163 
Diluted weighted average common shares outstanding171,492 170,659 171,332 170,325 
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, 2024July 2, 2023June 30, 2024July 2, 2023
Net revenues:
 
 
 
 
U.S.$289,304 $267,417 $585,239 $548,761 
International125,269 120,588 250,019 232,576 
Market Development24,236 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 2023267,417 120,588 20,877 408,882 
Total Net Revenues Growth21,887 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 2023266,784 120,588 20,877 408,249 
Adjusted net revenue growth22,520 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 2023548,761 232,576 46,495 827,832 
Total Net Revenues Growth36,478 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 2023542,445 232,576 46,495 821,516 
Adjusted net revenue growth42,794 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 2022244,665110,55820,022375,245
Total Net Revenues Growth22,75210,03085533,637
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 2022234,634110,55820,022365,214
Adjusted net revenue growth32,78310,03085543,668
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 2022492,584215,05140,142747,777
Total Net Revenues Growth56,17717,5256,35380,055
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 2022479,366215,05140,142734,559
Adjusted net revenue growth69,39517,5256,35393,273
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 EndedFiscal Year Ended
(in thousands, unless otherwise stated)June 30, 2024December 31, 2023January 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 Spokes737,044 696,467 567,440 
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 EndedFiscal Year Ended
June 30, 2024July 2, 2023December 31, 2023
U.S.:
Hot Light Theater Shops229 228 229 
Fresh Shops70 66 70 
Cookie Bakeries286 244 267 
DFD Doors (2)
7,497 6,320 6,808 
Total8,082 6,858 7,374 
International:
Hot Light Theater Shops46 44 44 
Fresh Shops502 466 483 
Carts, Food Trucks, and Other (1)
18 16 16 
DFD Doors
4,871 3,396 3,977 
Total5,437 3,922 4,520 
Market Development:
Hot Light Theater Shops117 111 116 
Fresh Shops1,033 873 968 
Carts, Food Trucks, and Other (1)
30 28 30 
DFD Doors
1,154 1,080 1,139 
Total2,334 2,092 2,253 
Total Global Points of Access (as defined)15,853 12,872 14,147 
Total Hot Light Theater Shops392 383 389 
Total Fresh Shops1,605 1,405 1,521 
Total Cookie Bakeries286 244 267 
Total Shops2,283 2,032 2,177 
Total Carts, Food Trucks, and Other48 44 46 
Total DFD Doors13,522 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 EndedFiscal Year Ended
June 30, 2024July 2, 2023December 31, 2023
U.S.:
Hot Light Theater Shops (1)
222 221 220 
Doughnut Factories5 4 4 
Total227 225 224 
Hubs with Spokes151 143 149 
Hubs without Spokes76 82 75 
International:
Hot Light Theater Shops (1)
37 35 36 
Doughnut Factories14 14 14 
Total51 49 50 
Hubs with Spokes51 49 50 
Market Development:
Hot Light Theater Shops (1)
115 108 112 
Doughnut Factories26 23 23 
Total141 131 135 
Total Hubs419 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, 2024December 31, 2023
Current portion of long-term debt$59,827 $54,631 
Long-term debt, less current portion894,979 836,615 
Total long-term debt, including debt issuance costs
954,806 891,246 
Add back: Debt issuance costs3,847 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 quarters220,796 211,624 
Net leverage ratio4.2 x4.1 x

v3.24.2.u1
Cover Page Document
Aug. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 2024
Entity Registrant Name Krispy Kreme, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40573
Entity Tax Identification Number 37-1701311
Entity Address, Address Line One 2116 Hawkins Street
Entity Address, City or Town Charlotte
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28203
City Area Code 800
Local Phone Number 457-4779
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol DNUT
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001857154
Amendment Flag false
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