Starbucks or Krispy Kreme: Which Company Posted the Stronger Quarter?

Starbucks and Krispy Kreme have both recently released their earnings results, so let's find out which had the better quarter.

Jun 16, 2014 at 11:20AM

Starbucks (NASDAQ:SBUX) and Krispy Kreme (NYSE:KKD) are two of the largest coffee and quick-serve restaurant chains in the world, and both have recently released earnings for their respective quarters. Let's compare the companies' results and outlooks on the rest of the fiscal year to determine which had the better quarter and could provide the highest returns for investors going forward.

Breaking down the quarterly results

Screen Shot

Source: Wikimedia Commons.

Starbucks released its second-quarter report for fiscal 2014 on April 24 and the results were mixed compared to the consensus analyst estimates; here's a breakdown and year-over-year comparison:

Earnings per share $0.56 $0.56
Revenue $3.87 billion $3.95 billion

Source: Benzinga.

  • Earnings per share increased 17%
  • Revenue increased 9.1%
  • Comparable-store sales data by region:
    • Americas: 6% increase
    • EMEA: 6% increase
    • China and Asia-Pacific: 7% increase
    • Overall: 6% increase
  • Operating profit increased 18.4% to $644.1 million
  • Operating margin expanded 130 basis points to 16.6%
  • Returned nearly $500 million to shareholders by repurchasing approximately 3.5 million shares of its common stock and paying a quarterly dividend of $0.26 per share; there are now approximately 22 million shares available for purchase under Starbucks' previous authorizations.
  • Expansion update: Starbucks opened 335 net new stores during the quarter, bringing its total store count to 20,519 worldwide.
Screen Shot

Source: Wikimedia Commons.

Krispy Kreme released its first-quarter report for fiscal 2015 on June 2 and the results were mixed compared to the consensus analyst estimates as well; here's a breakdown and a year-over-year comparison:

Earnings per share $0.23 $0.23
Revenue $121.58 million $126.68 million

Source: Benzinga.

  • Earnings per share increased 15%
  • Revenue increased 0.8%
  • Comparable-store sales data by segment:
    • Company-owned stores: 1.5% decrease
    • Domestic franchises: 4.5% increase
    • International franchises: 2.2% decrease
  • Operating profit increased 6.6% to $16.2 million
  • Operating margin expanded 70 basis points to 13.3%
  • Repurchased approximately 1.44 million shares of its common stock for $25.48 million; there is now approximately $25 million remaining on the company's existing share repurchase authorization.
  • Expansion update: Krispy Kreme opened 27 net new stores during the quarter, bringing its total store count to 855 worldwide.

What will the remainder of the year hold?

Screen Shot

Source: Wikimedia Commons.

Following its strong second quarter, Starbucks increased its earnings-per-share guidance and reaffirmed its full-year growth expectations; here's what the company now expects to accomplish:

  • Earnings per share in the range of $2.62-$2.68
  • Net sales growth of 10% or more
  • Global comparable-store sales in the mid-single-digit percentage range
  • Operating margin expansion of 175-200 basis points
  • Opening approximately 1,500 net new stores
The new earnings per share outlook calls for growth of 15.9%-18.6% from fiscal 2013 and the sales growth projection would propel revenue over $16.3 billion for the year; both of these would be record-setting performances. Also, after 335 stores opened up in the first quarter, Starbucks appears to be on pace to achieve its expansion goal for the year, which would bring its worldwide store count to over 21,250.

Screen Shot

Source: Wikimedia Commons.

As a result of its weaker-than-expected first-quarter results, Krispy Kreme lowered its full-year earnings-per-share outlook; here's the company's new outlook versus its previous one:

MetricPrevious OutlookCurrent Outlook
Earnings per share $0.73-$0.79 $0.69-$0.74
EPS growth 19.7%-29.5% 13.1%-21.3%

Source: Krispy Kreme.

As you can see, Krispy Kreme's new outlook calls for significantly less growth than its previous one had, and the outlook also came in below the consensus analyst estimate of $0.78 per share. Krispy Kreme stated that this reduction resulted from "unfavorable" first-quarter results, higher-than-expected expenses related to its new technology systems, and higher-than-expected compensation-related expenses, among other things. 

Screen Shot

Source: Wikimedia Commons

And the winner is...
After comparing the companies' quarterly results and outlooks on the rest of the year, the winner of this match-up is Starbucks; its growth outpaced that of Krispy Kreme in every key financial category and its outlook calls for much higher growth going forward.

On the day of its earnings release, Starbucks' stock rose 0.51% and it has continued higher in the weeks since; however, even after this rally, it still sits more than 9% below its 52-week high and has a dividend yield of about 1.4%, which represents a great investment opportunity. Foolish investors should strongly consider buying in right now, because I believe the long-term potential of Starbucks is much greater than that of any other company in the industry.

Not a coffee drinker? Then check out these top dividend stocks
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Joseph Solitro has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Starbucks. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers