What Happened?
Shares of doughnut chain Krispy Kreme (NASDAQ: DNUT) fell 25.4% in the afternoon session after the company reported weak first quarter 2025 results which included a significant miss on next quarter's revenue guidance and EBITDA that fell short of Wall Street's estimates. Revenue dropped 15%, and even excluding last year's Insomnia divestment, organic sales still dipped 1%. Margins crumbled, EBITDA margin fell, with the U.S. business taking the hardest hit. Overall, this was a bad quarter.
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What The Market Is Telling Us
Krispy Kreme’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Krispy Kreme and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 26.1% on the news that the company reported disappointing Q4 2024 results as it missed across all key metrics, including sales, operating profits, and earnings. Revenue fell 10.4% year on year, reflecting a decline in U.S. sales due to the Insomnia Cookies divestiture and the impact of a cybersecurity incident that cost an estimated $11 million in lost revenue. Looking ahead, Krispy Kreme's full-year revenue, EPS, and EBITDA guidance all fell short of Wall Street's expectations. Overall, this was a softer quarter, with weaker performance and cautious guidance weighing on investor sentiment.
Krispy Kreme is down 66.6% since the beginning of the year, and at $3.25 per share, it is trading 75.1% below its 52-week high of $13.01 from May 2024. Investors who bought $1,000 worth of Krispy Kreme’s shares at the IPO in June 2021 would now be looking at an investment worth $154.52.
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