Key Highlights
- Shares of DNUT surged 17.1% in premarket trading following Q4 adjusted earnings of $0.09 per share, crushing the $0.03 estimate
- Fourth quarter revenues reached $392.4 million, surpassing analyst projections of $389.47 million
- Adjusted EBITDA climbed 21% year-over-year to $55.6 million, with margins improving by 280 basis points to reach 14.2%
- Strategic store closures resulted in a 13.5% reduction in Global Points of Access, now totaling 15,194 locations
- 2026 outlook calls for systemwide sales expansion of 2–4% with the company projecting positive free cash flow generation
Krispy Kreme (DNUT) experienced a significant 17.1% surge during Thursday’s premarket session following the release of fourth quarter financial results that exceeded Wall Street’s projections across key metrics.
The donut retailer delivered adjusted earnings per share of $0.09 for the fourth quarter, substantially higher than analyst consensus estimates of $0.03. Total revenues of $392.4 million also topped expectations, which had been set at $389.47 million.
Investors responded enthusiastically to the results, sending shares sharply higher.
Net revenues for the fourth quarter declined 2.9% compared to the $404 million reported in the year-ago period. However, this decrease was strategic — the company has been actively shuttering unprofitable stores as part of its operational restructuring.
The company’s Global Points of Access contracted by 13.5% to 15,194, representing a reduction of 2,363 locations versus the prior year. While the decline appears substantial, management is deliberately prioritizing profitability over sheer location count.
The strategy appears to be yielding results. Adjusted EBITDA grew 21% on a year-over-year basis to $55.6 million, while the adjusted EBITDA margin improved by 280 basis points to 14.2%.
Profitability Improvements Drive Performance
The enhanced margin performance stemmed from several factors including operational efficiency improvements, selling, general and administrative expense reductions, elimination of costs associated with the terminated McDonald’s USA agreement, and $4.8 million received from business interruption insurance claims connected to a cybersecurity breach that occurred in 2024.
Within the domestic U.S. segment, average weekly revenue per location increased 4.5% year-over-year to $660, benefiting from the closure of lower-performing stores. U.S. Adjusted EBITDA improved by $9.2 million to reach $32.8 million.
From a GAAP accounting perspective, results were less favorable. The company recorded a net loss of $29.1 million, equivalent to $0.17 per share, versus a net loss of $22.2 million, or $0.13 per share, during Q4 2024.
For fiscal year 2025 in its entirety, DNUT reported net revenues of $1.52 billion, representing an 8.6% decline from the prior year’s $1.67 billion. The full-year GAAP net loss totaled $523.8 million, a sharp reversal from the $3.8 million in net income recorded in 2024. The substantial loss was partially attributed to divesting a majority ownership position in Insomnia Cookies and ending the McDonald’s partnership.
Full-year adjusted EBITDA decreased 27.5% to $140.3 million.
Forward-Looking Guidance for 2026
For the coming year, Krispy Kreme projects systemwide sales growth in the range of 2% to 4% on a constant currency basis from the 2025 baseline of $1.96 billion.
Management intends to open a minimum of 100 new shop locations worldwide and anticipates capital spending between $50 million and $60 million. The company also forecasts positive free cash flow generation and a net leverage ratio at or beneath 5.5x.
DNUT revealed a refranchising transaction for its Japan business operations, scheduled to finalize in Q1 2026 with expected cash proceeds approximating $65 million. Additionally, the company plans to restructure its Western U.S. joint venture arrangement with WKS Restaurant Group.
Digital sales grew as a proportion of retail sales to 18.2% in 2025, up from 14.4% in the previous year — representing a 380 basis point improvement.
CEO Josh Charlesworth emphasized the company’s commitment to “profitable U.S. expansion and capital-light international franchise growth” as fundamental elements of its turnaround strategy.
The Japan refranchising transaction is anticipated to reach completion during the first quarter of 2026.
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