Why Krispy Kreme Doughnuts Shares Were Glazed, Temporarily

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Krispy Kreme Doughnuts (NYSE: KKD  ) , donut maker extraordinaire, shed as much as 10% after reporting its fourth-quarter earnings results. However, shares have retraced much of their losses and are down less than 4% as of this writing.

So what: For the quarter, Krispy Kreme reported a robust 16% increase in revenue, to $118.1 million over the year-ago period, as adjusted net income soared 85%, to $0.11 per share. Wall Street had also been expecting $0.11 in EPS, but was looking for only $116.5 million in revenue. Most importantly, same-store sales growth of 7.5% shows continued emphasis on driving traffic and higher ticket sales. Looking ahead, Krispy Kreme forecast full-year 2014 EPS of $0.53-$0.57, which is noticeably higher than the $0.52 the Street expected, but not nearly high enough for investors who had bet on a fatter figure.

Now what: All told, this was an exceptionally good report from Krispy Kreme, and it probably didn't deserve the 10% lashing it took earlier in the session. I'm not a huge fan of the run its share price has had, and feel that investors may have become a bit exuberant with its outlook; however, Krispy Kreme's management continues to rely on menu innovation, signature coffee blends, and expansion into emerging markets as its keys to growing the business. From a bystander's viewpoint, this was a solid quarter.

Craving more input? Start by adding Krispy Kreme Doughnuts to your free and personalized Watchlist so you can keep up on the latest news with the company.

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  • Report this Comment On March 18, 2013, at 7:44 PM, thunderboltnova wrote:

    The problem with Krispy Kreme is they lie about their earnings and never are punished for it. I can remember when they lied about growing 20% and the owners daughter was selling left and right.

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Related Tickers

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KKD $0.00 Down +0.00 +0.00%
Krispy Kreme Dough… CAPS Rating: **