U.S. News

Krispy Kreme First-Quarter Loss Widens, Shares Drop


Krispy Kreme Doughnuts said Monday its first-quarter loss widened as the doughnut maker continues its recovery from a bad stumble several years ago.

For the quarter ending April 29, the doughnut maker said its net loss was $7.4 million, or 12 cents per share, compared with a net loss of $6 million, or 10 cents per share, in the year-earlier quarter.

Revenue for the quarter was $110.9 million, down from $119.4 million a year earlier.

The results include a $9.6 million charge related to a prepayment fee and the write-off of deferred financing costs. The company also received a $14.9 million credit due to the decrease in the fair value of securities it issued in connection with the settlement of litigation.

Wall Street expected earnings of 5 cents per share on $115.7 million of sales, according to analysts polled by Thomson Financial.

"While Krispy Kreme still faces some longstanding challenges, we continue to advance the turnaround," said Chief Executive Daryl Brewster in a statement.

Krispy Kreme executives were expected to speak with shareholders Monday during the company's annual meeting in Winston-Salem.

Krispy Kreme stumbled badly three years ago as it placed its famed doughnuts on grocery store shelves and expanded rapidly. While sales slipped, Krispy Kreme executives were forced to sort out an accounting mess.

A stock that once traded at more than $50 bottomed out last year at about $4, and the company's board ousted two former executives it said were trying to "manage earnings" to meet Wall Street expectations.

Krispy Kreme has since worked to bring its financials up to date with the U.S. Securities and Exchange Commission. The company filed its last overdue financial statement in January.