What happened

Shares of Krispy Kreme (DNUT -3.57%) were sharply lower Wednesday morning, tumbling as much as 14.9%. As of 2:25 p.m. ET, the stock was still down 11.8%.

The catalyst that sent the donut maker lower was the company's financial report, which left investors with empty stomachs.

So what

Krispy Kreme generated second-quarter revenue of $375.2 million, up 7.5% year over year, though a strong dollar negatively affected the top line. Excluding the headwinds resulting from foreign currency translation, revenue was up 10%.  

Inflation also ate into the bottom line, as management cited higher wages and commodity costs that cut into its operating results. This caused adjusted EBITDA to decline 10%, resulting in adjusted earnings per share (EPS) of $0.08, a decline of roughly 38%.

Analysts had been expecting revenue of $385.9 million and adjusted EPS of $0.10, so Krispy Kreme missed on both counts. 

In addition to higher input costs, the company cited softer consumer spending and the heatwave in the U.K. as weighing on its results.

It continued to increase its footprint, however, expanding the number of locations where its fresh doughnuts can be purchased by 382, bringing the total to more than 11,400 worldwide. Additionally, Krispy Kreme signed agreements to enter four new international markets, including Switzerland, Chile, Costa Rica, and Jordan, while increasing its footprint in Turkey. 

Now what

Perhaps the most disappointing point for investors was that management lowered its guidance. Citing the macroeconomic challenges that remain, Krispy Kreme is now guiding for full-year revenue in a range of $1.49 billion to $1.52 billion, representing growth of 8.7% at the midpoint of its guidance, down from its previous forecast for 11.6% growth, which management issued just three months ago. 

The lowered outlook extended to the bottom line, and the company is now guiding for adjusted diluted EPS in a range of $0.29 to $0.32, down from its previous range of $0.38 to $0.41.

Macroeconomic conditions aside, the donut maker maintained its long-term outlook, which calls for organic revenue growth of about 10% and adjusted net income growth of roughly 20%. While Krispy Kreme certainly faces challenges over the short term, the stock still has the potential to be a tasty treat.