Krispy Kreme Earnings Exceed Profit Estimates
Krispy Kreme earnings beat on adjusted EPS and margin expansion despite lower revenue and closures, sparking a sharp share rally and higher trading flows.
KEY TAKEAWAYS
- Adjusted EPS $0.09 beat estimates and adjusted EBITDA rose 21% to $56 million.
- Revenue fell to $392 million after 2,363 store closures while free cash flow was $28 million.
- Company guided systemwide sales growth 2.0%–4.0% and projected positive free cash flow for 2026.
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Krispy Kreme’s earnings on Feb. 26, 2026 showed stronger-than-expected profitability and margin improvement despite a revenue decline tied to closures of low-traffic locations. Management said it expects systemwide sales growth and positive free cash flow in 2026.
Quarter Results and Margins
Krispy Kreme reported fourth-quarter net revenue of $392.4 million, down 2.9% year over year but above analyst estimates of $389–$389.5 million, according to a press release on Feb. 26, 2026. Adjusted net income rose to $15.0 million, or $0.09 a share, beating EPS estimates of $0.03–$0.04. Adjusted EBITDA increased 21% to $55.6 million, and the adjusted EBITDA margin expanded to 14.2% from 11.4%. GAAP results showed a net loss of $29.1 million, or $0.17 a share.
U.S. net revenue declined 6.1% to $230.2 million, while sales per day (APD) rose 4.5% to $660, indicating higher sales intensity at remaining U.S. locations. The quarter generated $27.9 million in free cash flow and $45.0 million in operating cash flow, which the company cited as supporting its improving adjusted results.
Operations and Outlook
Management attributed the revenue decline to a strategic reduction of 2,363 underperforming Global Points of Access, a 13.5% cut that left 15,194 locations. This pullback is central to the company’s turnaround, trading top-line scale for higher profitability per outlet.
For fiscal 2025, net revenue fell 8.6% to $1.52 billion, with organic revenue down 1.3%. Systemwide sales rose 0.7% on a constant-currency basis to $1.96 billion. The year included a GAAP net loss of $523.8 million, or $3.02 a share, and adjusted EBITDA declined 27.5% to $140.3 million.
Capital expenditures totaled $97.9 million, about 6.4% of revenue. During 2025, Krispy Kreme ended its McDonald’s USA agreement on July 2 and sold its majority stake in Insomnia Cookies, moves linked to the top-line shift.
Looking ahead, the company expects systemwide sales to rise 2%–4% on a constant-currency basis from last year’s level. It plans to open at least 100 global shops after ending 2025 with 2,125 locations, anticipates capital spending of $50–60 million, and projects positive free cash flow. The company is pursuing additional refranchising to reduce net leverage and aims for roughly half of systemwide sales to come from franchisees by fiscal 2027.
CEO Josh Charlesworth said, "We are pleased to have ended 2025 with positive momentum, driven by quality growth in the U.S."
