What happened

Krispy Kreme (DNUT 4.96%) shareholders saw big gains on a down day for the market on Tuesday. The doughnut specialist's stock was up 13% by 3 p.m. ET while the S&P 500 fell slightly.

The company announced a new promotion aimed at boosting customer traffic through the New Year holiday, but shares have also been volatile since Krispy Kreme's initial public offering (IPO) in June.

A person holding a doughnut and looking through the center.

Image source: Getty Images.

So what

Krispy Kreme launched a temporary sale on doughnuts, with two dozen of its glazed treats selling across U.S. locations for $12 through Jan. 2. Management recently credited seasonal promotions like this for helping drive traffic through 2021. Organic growth was 14% in the fiscal third quarter, for example, in part thanks to promotions that drove higher loyalty membership.

"We've had extremely successful seasonal activations across the globe," CEO Mike Tattersfield said in a November conference call. Tuesday's deal fits right in with that strategy of capitalizing on Krispy Kreme's core strength of fresh doughnuts as a means for boosting overall sales of food and coffee beverages.

Even a major promotion wouldn't normally move a restaurant chain's stock by double digits. However, investors are still undecided on the value of the business, which has been public for just two quarters.

Now what

Krispy Kreme's outlook calls for sales to land between $1.34 billion and $1.38 billion for the full 2021 year, which equates to gains ranging from 19% to 23%. Management's long-term target is to boost organic revenue by about 10% per year while steadily boosting profitability.

Progress toward those ambitious goals is the main factor that will drive shareholder returns over the next few years. In the meantime, look for the growth stock to remain volatile, with down days and rallies, even in response to seemingly minor news .