Shares of the iconic donut and coffee maker Krispy Kreme (DNUT -1.25%) had declined by about 24% as of 11:07 a.m. ET today after the company reported disappointing fourth-quarter earnings and fiscal 2025 guidance.
A donut hole for earnings
There wasn't a whole lot to like in Krispy Kreme's earnings, which missed on the top and bottom lines and disappointed on 2025 guidance. Adjusted earnings of a penny missed consensus Wall Street estimates of $0.10, while revenue of $404 million also missed consensus estimate of $414 million, according to FactSet. For the fiscal year 2025, the company guided for revenue of $1.55 billion to $1.65 billion and adjusted earnings per share of $0.04 to $0.08, once again coming up short of consensus.
During the quarter, Krispy Kreme reported organic revenue growth of about 2% year over year. The company also dealt with a cybersecurity incident that impacted online ordering and resulted in a revenue hit of $11 million as well as $3 million of remediation expenses. The company's decision to sell a majority stake in Insomnia Cookies also resulted in a $101 million impact to revenue.
Not all bad, but sentiment just got worse
Krispy Kreme still managed to grow organic revenue 5% in fiscal 2024 and has a new partnership delivering donuts for McDonald's, which offers promise. Analysts are largely optimistic when it comes to their price targets for the stock. However, this recent earnings report is likely to lead to lower price targets and hurt investor confidence. With questions about the strength of the consumer, it may be best to add this to your watch list right now instead of immediately buying the dip.
