Krispy Kreme Doughnuts Misses Where it Counts

Krispy Kreme Doughnuts (NYSE: KKD  ) reported earnings on March 14. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 3 (Q4), Krispy Kreme Doughnuts beat slightly on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly. GAAP earnings per share dropped significantly.

Gross margins expanded, operating margins expanded, net margins dropped.

Revenue details
Krispy Kreme Doughnuts chalked up revenue of $118.1 million. The eight analysts polled by S&P Capital IQ predicted revenue of $116.5 million on the same basis. GAAP reported sales were 16% higher than the prior-year quarter's $102.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.07. The seven earnings estimates compiled by S&P Capital IQ forecast $0.08 per share. GAAP EPS of $0.07 for Q4 were 97% lower than the prior-year quarter's $2.01 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 16.8%, 300 basis points better than the prior-year quarter. Operating margin was 7.2%, 190 basis points better than the prior-year quarter. Net margin was 4.0%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $118.5 million. On the bottom line, the average EPS estimate is $0.11.

Next year's average estimate for revenue is $468.8 million. The average EPS estimate is $0.40.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 458 members out of 834 rating the stock outperform, and 376 members rating it underperform. Among 220 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 128 give Krispy Kreme Doughnuts a green thumbs-up, and 92 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Krispy Kreme Doughnuts is outperform, with an average price target of $12.50.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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