News

Krispy Kreme Q3 profit nearly doubles

November 30, 2011

Krispy Kreme Doughnuts Inc. has reported financial results for its third quarter of fiscal 2012, ended Oct. 30, 2011, which included $4.7 million in net income, compared to $2.4 million in the same period last year.

These results put Krispy Kreme at 7 cents per share diluted, versus 3 cents per share diluted in Q3 2011.

Revenues were up 9.4 percent to $98.7 million, an increase from $90.2 million last year. Company same-store sales rose 4 percent, marking the 12th consecutive quarterly increase.

Additionally, operating income was up 36.2 percent to $5.6 million.

The company ended the quarter with a total of 678 Krispy Kreme stores systemwide, a net increase of nine shops during the quarter. As of Oct. 30, 2011, there were 89 company stores and 589 franchise locations.

"Our third quarter performance reflects continued progress in strengthening our financial condition and realizing our vision for the Krispy Kreme brand," said James H. Morgan, CEO. "While we are encouraged by our near-term results, we also believe that maintaining a longer term perspective is critical to building shareholder value. We are therefore working on a number of initiatives to improve profitability in the company stores segment in the years ahead.

"In addition, within our franchise segments, we are expanding our international franchisee pipeline to expand our geographic reach and market penetration, developing plans to reintroduce domestic franchise marketing, and improving support to our existing franchisees throughout the world."

Krispy Kreme expanding footprint in Japan

Japan is included in Krispy Kreme's international franchisee pipeline. The Winston-Salem, N.C.-based company announced this week that it has signed additional development agreements with its Japanese franchisee, Krispy Kreme Doughnut Japan Co. Ltd.

As part of the new agreements, the franchisee will build an additional 19 locations throughout the next five years that will be located in the Kyushu and Chugoku regions of Japan.

The company recently announced the development of 73 new locations in the Kanto, Kansai and Chubu regions of the country.

"This expanded commitment by our Japanese franchise partners speaks to the confidence we all have in the success of this relationship," said Jeff Welch, Krispy Kreme president, International. "We are very excited about the possibilities this region of the world holds for Krispy Kreme."

Currently, the Krispy Kreme Original Glazed doughnut can be found in 21 countries.

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