CHARLOTTE, N.C. - Krispy Kreme, Inc. (NASDAQ: DNUT) announced its first-quarter financial results today, revealing a 5.7% increase in net revenue, reaching $442.7 million, which surpassed the analyst consensus estimate of $435.15 million. The company's adjusted earnings per share (EPS) met expectations at $0.07, aligning with analysts' forecasts.
The first quarter saw a notable 6.7% rise in organic revenue, reaching $440.9 million, compared to the same period last year. Despite this growth, Krispy Kreme experienced a GAAP net loss of $6.7 million, a downturn from the net income of $1.6 million reported in the first quarter of the previous year.
The company attributes its top-line growth to increased digital sales and robust consumer demand, with a record-setting Valentine's Day contributing significantly to the results.
CEO Josh Charlesworth highlighted the company's successful omni-channel strategy and the expansion of the Delivered Fresh Daily program, which is expected to gain momentum through a partnership with McDonald’s (NYSE:MCD), potentially adding over 12,000 new points of access in the U.S. by the end of 2026.
Despite the positive revenue growth, Krispy Kreme's stock experienced a slight decline of -0.5% following the earnings release, indicating a muted investor response. The company's adjusted EBITDA grew by 5.9% to $58.2 million, with margins remaining steady at 13.1%. However, adjusted net income saw a 25.8% decrease to $11.3 million for the quarter, primarily due to higher depreciation, amortization, and interest expenses associated with the company's global expansion efforts.
In the U.S. segment, Krispy Kreme's net revenue increased by 5.2%, driven by a 7.4% growth in organic revenue and a 6.5% rise in sales per hub. The company's digital sales also improved, representing 19.3% of U.S. Fresh retail doughnut sales, a 480 basis point increase. The U.S. Adjusted EBITDA improved by 10.6% to $42.6 million.
Internationally, net revenue grew by 11.4%, with organic revenue up by 9.8%. The international segment's adjusted EBITDA increased by 8.2% to $20.5 million, despite lower volumes in the U.K. The Market Development segment saw a decrease in net and organic revenue by 14.1%, while adjusted EBITDA grew by 3.0% to $11.9 million.
Looking ahead, Krispy Kreme reaffirmed its full-year 2024 guidance, projecting net revenue growth of 5% to 7%, organic revenue growth of 6% to 8%, and adjusted EBITDA growth of 8% to 11%. The company anticipates adjusted diluted EPS to be between $0.27 and $0.31 and aims to reduce its net leverage as it progresses towards its 2026 goal.
Charlesworth expressed confidence in the company's strategy, stating, "Our focus on digital enhancements and expanding our global footprint is yielding tangible results, and we are well-positioned for continued profitable growth."
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