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Author: Alan LittleDate: 2022-02-23

Krispy Kreme (DNUT) +7% as strong festive sales drive Q4 profit

Krispy Kreme (DNUT) delivered its first profit since going public on Tuesday as strong sales of its fresh doughnuts boosted sales and shares moved 7% higher.

Krispy Kreme (DNUT) posted its first profit since going public on Tuesday as successful “limited time offerings” over Halloween and the festive period boosted sales and sent its shares 7% higher.

As trading resumed after the long bank holiday weekend in the US, investors were sifting through the details of Krispy Kreme’s report for the three months to 2nd January 2022.

It was a solid showing overall, though its earnings per share did fall 20% from a year ago to $0.08, which was a single cent shy of the Wall Street consensus.

Revenue went in the other direction, jumping 13.8% to more than $370.6m as higher prices for products and strong sales sent Krispy Kreme’s top line above the $364m forecasts.

That return was impressive considering a surge in operating expenses amid rising input and labour costs, a trend that has been prevalent across a wide range of industries.

Krispy Kreme is confident about the year ahead though and has guided for group sales of up to $1.56bn, which would represent growth of 12%, and adjusted earnings per share between $0.38 and $0.41.

CEO Mike Tattersfield believes that the firm’s performance in Q4 shows that its “global expansion strategy” and “omni-channel model” is working.

Expansion is also on the agenda during the next 12 months as Krispy Kreme looks to bring its “premium, fresh doughnuts” to at least three new countries.

The North Carolina-based business has traded lower since its widely publicised IPO in June last year.

Investors were buying into the company on Tuesday though, as a 7.4% advance by late morning pushed the share price to $14.75 and cut its six-month deficit to around 12%.

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