Krispy Kreme shares fall 11% following miss on revenues
- Krispy Kreme (KKD $16.88 -2.12) reported first quarter earnings of $0.23 per share, which is line with estimates, while revenues rose 0.8% year/year to $121.6 million which is lower than expected. Excluding the effects of refranchising three stores in Kansas and Missouri and three stores in Dallas in February and July of 2013, respectively, revenues rose 2.1%. "Today we reported our highest quarterly pretax earnings for a single quarter in over ten years, a remarkable achievement that reflects the collective efforts of our team members and franchise partners. We note, however, that severe winter weather adversely affected both on-premises and wholesale sales throughout our Company store base in the Southeast, and contributed to a 1.5% decline in same store sales at Company shops against a very tough 12.2% same store sales gain in the first quarter last year.
- Our domestic franchisees, however, who were less affected by weather, posted a gain in same store sales of 4.5% on top of an 11.8% rise in the first quarter last year." The company issued guidance for the fiscal year 2015 with lowered EPS to $0.69-0.74 from $0.73-0.79 which is below estimates. This reflects, among other things, an increase in estimated costs related to implementation of new technology systems, higher compensation costs related to management succession, an unfavorable variance to expected results in the first quarter, partially offset by lower forecasted current income tax expense.