Key Highlights
- Shares of DNUT surged 17.1% in premarket action following a Q4 adjusted EPS of $0.09, crushing the $0.03 estimate by $0.06
- Fourth quarter revenue reached $392.4 million, topping the consensus estimate of $389.47 million
- Adjusted EBITDA increased 21% to $55.6 million, while margins widened by 280 basis points to 14.2%
- Management is streamlining operations by shuttering underperforming stores, reducing Global Points of Access by 13.5% to 15,194
- The 2026 outlook calls for systemwide sales expansion of 2–4% alongside positive free cash flow generation
Krispy Kreme (DNUT) soared 17.1% during premarket hours Thursday following the release of fourth quarter financial results that exceeded analyst projections across key metrics.
The doughnut chain delivered adjusted earnings per share of $0.09 for the final quarter, significantly outperforming the consensus forecast of $0.03. Top-line performance also impressed, with revenue of $392.4 million surpassing Wall Street’s $389.47 million expectation.
Investors responded enthusiastically to the results, sending shares higher in early trading.
Net revenue for the quarter decreased 2.9% compared to the $404 million recorded in the year-ago period. However, this decline was strategic — management has deliberately shuttered underperforming stores as part of an ongoing operational transformation.
The company’s Global Points of Access contracted 13.5% to 15,194, representing a reduction of 2,363 locations year-over-year. While substantial, this reduction reflects a deliberate shift toward prioritizing profitability over sheer volume.
The strategy appears to be delivering results. Adjusted EBITDA surged 21% from the prior year to reach $55.6 million, while the adjusted EBITDA margin expanded by a meaningful 280 basis points to 14.2%.
Profitability Improvements Take Center Stage
The substantial margin enhancement resulted from multiple factors: productivity improvements, general and administrative expense reductions, elimination of costs associated with the terminated McDonald’s USA partnership, and $4.8 million in business interruption insurance proceeds stemming from a 2024 cybersecurity event.
Within the U.S. business, average revenue per door per week advanced 4.5% year-over-year to $660, boosted by the closure of lower-performing locations. U.S. Adjusted EBITDA improved by $9.2 million to reach $32.8 million.
On a GAAP basis, results were less encouraging. The company recorded a net loss of $29.1 million, or $0.17 per diluted share, versus a net loss of $22.2 million, or $0.13 per share, during Q4 2024.
For fiscal 2025 overall, DNUT generated net revenue of $1.52 billion, declining 8.6% from $1.67 billion. The full-year GAAP net loss totaled $523.8 million, contrasting with net income of $3.8 million in 2024. The substantial loss was partially attributable to divesting a majority interest in Insomnia Cookies and ending the McDonald’s partnership.
Full-year adjusted EBITDA declined 27.5% to $140.3 million.
2026 Outlook and Strategic Initiatives
For the coming year, Krispy Kreme anticipates systemwide sales growth between 2% and 4% in constant currency terms from the 2025 baseline of $1.96 billion.
Management plans to inaugurate at least 100 new locations worldwide and is projecting capital expenditures in the $50 million to $60 million range. The company also expects to generate positive free cash flow while maintaining a net leverage ratio at or below 5.5x.
DNUT disclosed a refranchising agreement for its Japan business, anticipated to close during Q1 2026 with cash proceeds of approximately $65 million. Additionally, the company intends to restructure its Western U.S. joint venture arrangement with WKS Restaurant Group.
Digital sales as a proportion of retail sales climbed to 18.2% in 2025, up from 14.4% in 2024 — representing a 380 basis point improvement.
CEO Josh Charlesworth said the company is focused on “profitable U.S. expansion and capital-light international franchise growth” as the core of its recovery plan.
The Japan refranchising transaction is scheduled to close in the first quarter of 2026.
