0001857154false00018571542024-05-092024-05-09


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________

FORM 8-K
_________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 9, 2024
Date of Report (Date of earliest event reported)
_________________________

Image_0.jpg
Krispy Kreme, Inc.
(Exact name of registrant as specified in its charter)
_________________________

Delaware001-4057337-1701311
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
2116 Hawkins Street, Charlotte, North Carolina 28203
(Address of principal executive offices)

(800) 457-4779
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)
_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-14(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.01 par value per share
DNUT
NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition.
The information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
On May 9, 2024, Krispy Kreme, Inc. (the "Company") issued a press release announcing the Company's financial results for the first quarter ended March 31, 2024. A copy of such press release is attached as Exhibit 99.1 and is also available on the Company’s website at investors.krispykreme.com.
Item 9.01. Financial Statements and Exhibits.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

KRISPY KREME, INC.

Dated: May 9, 2024

By:    /s/ Jeremiah Ashukian
Name:Jeremiah Ashukian
Title:Chief Financial Officer

EXHIBIT 99.1

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Krispy Kreme reports first quarter 2024 financial results and reaffirms full year 2024 guidance
First quarter Net Revenue grows 5.7%, Organic Revenue increases 6.7%
Delivered Fresh Daily expansion to accelerate with McDonald’s nationwide rollout
CHARLOTTE, NC (May 9, 2024) – Krispy Kreme, Inc. (NASDAQ: DNUT) (“Krispy Kreme”, “KKI”, or the “Company”) today reported financial results for the quarter ended March 31, 2024.
First Quarter Highlights (vs Q1 2023)
•Net revenue grew 5.7% to $442.7 million
•Organic revenue grew 6.7% to $440.9 million
•GAAP net loss of $6.7 million
•GAAP net loss attributable to KKI of $8.5 million
•Adjusted EBITDA grew 5.9% to $58.2 million
•Global Points of Access increased 2,404, or 19.4% to 14,814

“First-quarter results exceeded our expectations, driven by increased digital sales and strong consumer demand, highlighted by a record setting Valentine’s Day with specialty doughnuts available in 33 countries around the world,” said Josh Charlesworth, CEO.

“Our strategy of making fresh Krispy Kreme doughnuts more available globally is providing impressive results,” continued Charlesworth. “We are modernizing how we make and move doughnuts to ensure high quality, profitable growth. Our Delivered Fresh Daily expansion is accelerating into more grocers, convenience stores and quick service restaurants. We’re excited about our recently announced agreement with McDonald’s, which is expected to more than 12,000 new points of access in the U.S. by the end of 2026. We’ll support much of this nationwide rollout using existing capacity, while adding distribution with other major customers as we grow,” he said.
Financial Highlights
Quarter Ended
$ in millions, except per share dataMarch 31, 2024April 2, 2023Change
GAAP:
  Net revenue$442.7 $419.0 5.7 %
  Operating income$11.9 $14.9 (20.3)%
  Operating income margin2.7 %3.6 %(90) bps
  Net (loss)/income$(6.7)$1.6 nm
  Net loss attributable to KKI$(8.5)$(0.3)nm
  Diluted loss per share$(0.05)$0.00 $(0.05)
Non-GAAP:
  Organic revenue(1)
$440.9 $413.3 6.7 %
  Adjusted net income, diluted(1)
$11.3 $15.3 (25.8)%
  Adjusted EBITDA(1)
$58.2 $54.9 5.9 %
  Adjusted EBITDA margin(1)
13.1 %13.1 %nm
  Adjusted diluted EPS(1)
$0.07 $0.09 $(0.02)
Notes:
(1)Non-GAAP figures – please refer to Reconciliation of Non-GAAP Financial Measures.




Key Operating Metrics
Quarter Ended
$ in millionsMarch 31, 2024April 2, 2023Change
Global Points of Access14,814 12,410 19.4 %
Sales per Hub (U.S.) TTM$4.9 $4.6 6.5 %
Sales per Hub (International) TTM$10.2 $9.8 4.1 %
Digital Sales as a Percent of Retail Sales23.0 %19.6 %340 bps
First Quarter 2024 Consolidated Results (vs Q1 2023)
Krispy Kreme’s first quarter results reflect continued year-over-year growth as the Company continued to execute upon our omni-channel strategy. Net revenue grew 5.7% to $442.7 million, compared to $419.0 million. GAAP net loss was $6.7 million compared to prior year net income of $1.6 million. GAAP diluted loss per share was $(0.05), a decline of $(0.05) from the same quarter last year.
Total company organic revenue grew 6.7%, fueled by a 19.4% increase in Points of Access and the success of global brand activations including Valentine’s Day and St. Patrick’s Day doughnuts among others. Digital sales as a percent of retail sales increased 340 basis points to 23.0% of sales, due to a focus on owned channel improvements and increasing product availability through third parties.
Adjusted EBITDA in the quarter grew 5.9% to $58.2 million, with Adjusted EBITDA margins flat at 13.1%. Adjusted Net Income, diluted declined 25.8% to $11.3 million in the quarter. Adjusted Diluted EPS declined to $0.07 from $0.09 in the same quarter last year, primarily driven by increased depreciation and amortization and interest expenses, as the Company continues to invest in global expansion.
First Quarter 2024 Segment Results (vs Q1 2023)
U.S.: In the U.S. segment, net revenue grew $14.6 million, or 5.2%, with organic revenue growth of 7.4%. Revenue growth was driven by increased Points of Access (“POA”) as we continue to accelerate our Delivered Fresh Daily strategy, combined with successful specialty doughnut collections linked to seasonal events. The gap between organic revenue growth and net revenue growth was primarily attributable to the exit of the Branded Sweet Treats business.
Sales per hub in the U.S. increased 6.5% to $4.9 million while DFD average sales per door per week remained stable at $640. Digital sales as a percentage of U.S. Fresh retail doughnut sales increased 480 basis points to 19.3% benefiting from successful marketing integrations and an expanded delivery radius.
U.S. Adjusted EBITDA increased 10.6% to $42.6 million with Adjusted EBITDA margin expansion of 70 basis points to 14.4% tied to labor and waste optimization and productivity benefits from the Company’s Hub and Spoke model.
International: In the International segment, which is now made up of all equity owned businesses including Japan and Canada, saw net revenue grow $12.8 million, or 11.4%. International organic revenue grew 9.8%, driven by record POA growth of 917, or nearly 24% growth, and successful marketing activations.
International Adjusted EBITDA grew 8.2% to $20.5 million with adjusted EBITDA margin declining approximately 50 basis points, as lower volumes in the U.K. continued to more than offset strength in Canada and Mexico.
Market Development: In the Market Development segment, which is now comprised of our franchise businesses both domestically in the U.S. and internationally, net revenue and organic revenue declined $3.6 million, or 14.1%, largely driven by a one-off timing impact of equipment sales in the prior year.
Market Development Adjusted EBITDA grew 3.0% to $11.9 million. Adjusted EBITDA margins expanded 900 basis points to 54.1%, due to the timing of lower margin equipment sales and the expansion of the Company’s Hub and Spoke model throughout international franchises.
Balance Sheet and Capital Expenditures
During the first quarter of 2024, the Company invested $29.1 million in capital expenditures, driven primarily by investments in the Hub and Spoke model in preparation for the U.S. expansion of our Delivered Fresh Daily network, information technology investments, and continued expansion at Insomnia Cookies.
As of March 31, 2024 the Company has total available liquidity of $133.6 million, including $33.1 million of cash and cash equivalents as well as undrawn capacity of roughly $100.5 million under available credit facilities. In 2023, the Company extended maturities of its primary debt facility to 2028 and as of March 31, 2024 has total debt of $946.2 million and net debt of $913.1 million.



2024 Financial Guidance
Krispy Kreme reaffirms the following guidance for the full year 2024 (vs FY2023)
•Net Revenue growth of +5% to +7%
•Organic Revenue growth of +6% to +8%
•Adjusted EBITDA growth of +8% to +11%
•Adjusted Diluted EPS of $0.27 to $0.31
•Income Tax rate between 26% and 28%
•Capital Expenditures of 7% to 8% of net revenue
•Interest Expense, net of $55 million to $65 million
The above guidance assumes nominal impact from foreign exchange. The Company continues to expect to reduce its net leverage in 2024, as it makes progress towards its 2026 goal of approximately 2.0x to 2.5x net leverage.
On October 3, 2023, the Company announced it is exploring strategic alternatives for Insomnia Cookies. Guidance for the full year 2024 includes operations from Insomnia Cookies.
Definitions
The following definitions apply to terms used throughout this press release:
•Global Points of Access: Reflects all locations at which fresh doughnuts or cookies can be purchased. We define global points of access to include all Hot Light Theater Shops, Fresh Shops, Carts and Food Trucks, DFD Doors and Cookie Shops, at both Company-owned and franchise locations as of the end of the respective reporting period. We monitor global points of access as a metric that informs the growth of our omni-channel presence over time and believe this metric is useful to investors to understand our footprint in each of our segments.
•Hubs: Reflects locations where fresh doughnuts are produced and processed for sale at any point of access. We define Hubs to include self-sustaining Hot Light Theater Shops and Doughnut Factories, at both Company-owned and franchise locations as of the end of the respective reporting period.
•Sales Per Hub: Sales per Hub equals Fresh Revenues from Hubs with Spokes, divided by the average number of Hubs with Spokes at the end of the five most recent quarters.
•Fresh Revenues from Hubs with Spokes: Fresh Revenues include product sales generated from our Doughnut Shop business (including digital), as well as DFD sales, but excluding sales from Branded Sweet Treats. It also excludes all Insomnia Cookies revenues as the measure is focused on the Krispy Kreme business. Fresh Revenues from Hubs with Spokes equals the Fresh Revenues derived from those Hubs currently producing product for other shops, Carts and Food Trucks, and/or DFD doors, but excluding Fresh Revenues derived from those Hubs not currently producing product for other shops, Carts and Food Trucks, and/or DFD doors.
•Free Cash Flow: Defined as cash provided by operating activities less purchases of property and equipment.
Conference Call
Krispy Kreme will host a public conference call at 8:30 AM Eastern Time today to discuss its results for the first quarter of 2024. The conference call can be accessed by dialing 1 (800) 715-9871 and entering the conference ID 5985470. International participants can access the call via the corresponding number listed HERE and entering the conference ID 5985470. To listen to the live audio webcast and Q&A, visit the Krispy Kreme investor relations website at investors.krispykreme.com. A replay and transcript of the webcast will be available on the website within 24 hours after the call. Krispy Kreme’s earnings press release and related materials will also be available on the investor relations section of the Company’s website.
Investor Relations
ir@krispykreme.com
Financial Media
Edelman Smithfield for Krispy Kreme, Inc.
Ashley Firlan & Ashna Vasa
KrispyKremeIR@edelman.com


About Krispy Kreme
Headquartered in Charlotte, N.C., Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Our iconic Original Glazed® doughnut is universally recognized for its hot-off-the-line, melt-in-your-mouth experience. Krispy Kreme operates in 39 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing digital business with more than 14,000 fresh points of access. Our purpose of touching and enhancing lives through the joy that is Krispy Kreme guides how we operate every day and is reflected in the love we have for our people, our communities and the planet. Connect with Krispy Kreme Doughnuts at www.KrispyKreme.com, or on one of its many social media channels, including www.Facebook.com/KrispyKreme and www.Twitter.com/KrispyKreme.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. The words “continue,” “towards,” “expect,” “outlook,” “guidance,” “explore,” or similar words, or the negative of these words, identify forward-looking statements. Such forward-looking statements are based on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed by us with the Securities and Exchange Commission (“SEC”) and described in the other filings we make from time to time with the SEC. We believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
Non-GAAP Measures
This press release includes certain non-GAAP financial measures including organic revenue growth, Adjusted EBITDA, Adjusted Net Income, Diluted, Adjusted Diluted EPS, Fresh Revenue from Hubs with Spokes and Sales per Hub, which differ from results using U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP financial measures in conjunction with our historical consolidated financial statements and notes thereto filed with the SEC.
To the extent that the Company provides guidance, it does so only on a non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inability to predict the amount and timing of impacts outside of the Company’s control on certain items, such as net income and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.


Krispy Kreme, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
Quarter Ended
March 31,
2024 (13 weeks)		April 2,
2023 (13 weeks)
Net revenues
Product sales$433,512 $410,674 
Royalties and other revenues9,186 8,276 
Total net revenues442,698 418,950 
Product and distribution costs107,015 117,833 
Operating expenses205,195 191,408 
Selling, general and administrative expense71,574 61,468 
Marketing expenses12,115 9,853 
Pre-opening costs1,105 764 
Other expenses/(income), net200 (5,263)
Depreciation and amortization expense33,586 27,939 
Operating income11,908 14,948 
Interest expense, net13,736 11,988 
Other non-operating expense, net573 999 
(Loss)/income before income taxes(2,401)1,961 
Income tax expense4,262 317 
Net (loss)/income(6,663)1,644 
Net income attributable to noncontrolling interest1,871 1,945 
Net loss attributable to Krispy Kreme, Inc.$(8,534)$(301)
Net loss per share:
Common stock — Basic$(0.05)$0.00 
Common stock — Diluted$(0.05)$0.00 
Weighted average shares outstanding:
Basic168,685 168,141 
Diluted168,685 168,141 


Krispy Kreme, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
As of
March 31,
2024		December 31,
2023
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$33,132 $38,185 
Restricted cash480 429 
Accounts receivable, net57,287 59,362 
Inventories39,257 34,716 
Taxes receivable18,397 15,526 
Prepaid expense and other current assets25,461 25,363 
Total current assets174,014 173,581 
Property and equipment, net543,100 538,220 
Goodwill1,098,826 1,101,939 
Other intangible assets, net938,847 946,349 
Operating lease right of use asset, net456,810 456,964 
Other assets22,721 23,539 
Total assets$3,234,318 $3,240,592 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$60,326 $54,631 
Current operating lease liabilities50,275 50,365 
Accounts payable128,555 156,488 
Accrued liabilities117,093 134,005 
Structured payables133,809 130,104 
Total current liabilities490,058 525,593 
Long-term debt, less current portion881,778 836,615 
Noncurrent operating lease liabilities454,265 454,583 
Deferred income taxes, net123,203 123,925 
Other long-term obligations and deferred credits37,127 36,093 
Total liabilities1,986,431 1,976,809 
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 300,000 shares authorized as of both March 31, 2024 and December 31, 2023; 168,731 and 168,628 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
1,687 1,686 
Additional paid-in capital1,449,773 1,443,591 
Shareholder note receivable(3,629)(3,850)
Accumulated other comprehensive (loss)/income, net of income tax(1,208)7,246 
Retained deficit(293,430)(278,990)
Total shareholders’ equity attributable to Krispy Kreme, Inc.1,153,193 1,169,683 
Noncontrolling interest94,694 94,100 
Total shareholders’ equity1,247,887 1,263,783 
Total liabilities and shareholders’ equity$3,234,318 $3,240,592 


Krispy Kreme, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Quarter Ended
March 31, 2024 (13 weeks)April 2, 2023 (13 weeks)
CASH FLOWS (USED FOR)/FROM OPERATING ACTIVITIES:
Net (loss)/income$(6,663)$1,644 
Adjustments to reconcile net (loss)/income to net cash (used for)/provided by operating activities:
Depreciation and amortization expense33,586 27,939 
Deferred and other income taxes214 (219)
Loss on extinguishment of debt— 472 
Impairment and lease termination charges247 4,900 
(Gain)/loss on disposal of property and equipment(49)33 
Gain on sale-leaseback— (9,661)
Share-based compensation6,986 5,545 
Change in accounts and notes receivable allowances113 334 
Inventory write-off411 7,115 
Settlement of interest rate swap derivatives— 7,657 
Amortization related to settlement of interest rate swap derivatives(2,955)— 
Other788 (204)
Change in operating assets and liabilities, excluding foreign currency translation adjustments(50,383)(35,190)
Net cash (used for)/provided by operating activities(17,705)10,365 
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Purchase of property and equipment(29,064)(26,553)
Proceeds from sale-leaseback— 10,025 
Other investing activities19 82 
Net cash used for investing activities(29,045)(16,446)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of debt179,500 891,698 
Repayment of long-term debt and lease obligations(132,343)(852,144)
Payment of financing costs— (5,000)
Proceeds from structured payables101,287 44,757 
Payments on structured payables(97,416)(70,480)
Capital contribution by shareholders, net of loans issued232 — 
Distribution to shareholders(5,902)(5,884)
Payments for repurchase and retirement of common stock(804)— 
Distribution to noncontrolling interest(977)(1,139)
Net cash provided by financing activities43,577 1,808 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1,829)(1,373)
Net decrease in cash, cash equivalents and restricted cash(5,002)(5,646)
Cash, cash equivalents and restricted cash at beginning of period38,614 35,730 
Cash, cash equivalents and restricted cash at end of period$33,612 $30,084 
Net cash (used for)/provided by operating activities$(17,705)$10,365 
Less: Purchase of property and equipment(29,064)(26,553)
Free cash flow$(46,769)$(16,188)


Krispy Kreme, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share amounts)
We define “Adjusted EBITDA” as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, and other certain non-recurring, infrequent or non-core income and expense items. Adjusted EBITDA is a principal metric that management uses to monitor and evaluate operating performance and provides a consistent benchmark for comparison across reporting periods.
We define “Adjusted Net Income, Diluted” as net loss attributable to common shareholders, adjusted for interest expense, share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, the tax impact of adjustments, and other certain non-recurring, infrequent or non-core income and expense items. “Adjusted EPS” is Adjusted Net Income, Diluted converted to a per share amount.
Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS have certain limitations, including adjustments for income and expense items that are required by GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses that are the same as or similar to some of the adjustments in this presentation, such as share-based compensation. Our presentation of Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS supplementally.
Quarter Ended
(in thousands)March 31, 2024April 2, 2023
Net (loss)/income$(6,663)$1,644 
Interest expense, net13,736 11,988 
Income tax expense4,262 317 
Depreciation and amortization expense33,586 27,939 
Share-based compensation6,986 5,545 
Employer payroll taxes related to share-based compensation43 25 
Other non-operating expense, net (1)
573 999 
Strategic initiatives (2)
4,821 13,469 
Acquisition and integration expenses (3)
248 91 
New market penetration expenses (4)
466 94 
Shop closure expenses/(income), net (5)
139 (679)
Restructuring and severance expenses (6)
6 580 
Gain on sale-leaseback— (9,661)
Other (7)
(15)2,577 
Adjusted EBITDA$58,188 $54,928 
Quarter Ended
(in thousands)March 31, 2024April 2, 2023
Segment Adjusted EBITDA:
U.S.$42,616 $38,535 
International20,536 18,982 
Market Development11,900 11,551 
Corporate(16,864)(14,140)
Total Adjusted EBITDA$58,188 $54,928 


Quarter Ended
(in thousands, except per share amounts)March 31, 2024April 2, 2023
Net (loss)/income$(6,663)$1,644 
Share-based compensation6,986 5,545 
Employer payroll taxes related to share-based compensation43 25 
Other non-operating expense, net (1)
573 999 
Strategic initiatives (2)
4,821 13,469 
Acquisition and integration expenses (3)
248 91 
New market penetration expenses (4)
466 94 
Shop closure expenses/(income), net (5)
139 (679)
Restructuring and severance expenses (6)
6 580 
Gain on sale-leaseback— (9,661)
Other (7)
(15)2,577 
Amortization of acquisition related intangibles (8)
7,420 7,273 
Loss on extinguishment of 2019 Facility (9)
— 472 
Tax impact of adjustments (10)
(224)(4,656)
Tax specific adjustments (11)
(589)(557)
Net income attributable to noncontrolling interest(1,871)(1,945)
Adjusted net income attributable to common shareholders - Basic$11,340 $15,271 
Additional income attributed to noncontrolling interest due to subsidiary potential common shares(19)(10)
Adjusted net income attributable to common shareholders - Diluted$11,321 $15,261 
Basic weighted average common shares outstanding168,685 168,141 
Dilutive effect of outstanding common stock options, RSUs, and PSUs2,488 1,850 
Diluted weighted average common shares outstanding171,173 169,991 
Adjusted net income per share attributable to common shareholders:
Basic$0.07$0.09
Diluted$0.07$0.09
(1)Primarily foreign translation gains and losses in each period.
(2)The quarter ended March 31, 2024 consists primarily of costs associated with global transformation, exploring strategic alternatives for the Insomnia Cookies business, and preparing for the McDonald’s U.S. expansion (with these specific initiatives aggregating to approximately $4.6 million of the total). The quarter ended April 2, 2023 consists primarily of costs associated with the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs (approximately $13.4 million of the total).
(3)Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period.
(4)Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including the Insomnia Cookies brand entering Canada and the U.K.
(5)Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. The quarter ended April 2, 2023 includes gains related to the termination of leases at certain Krispy Kreme shops in the U.S. where the Company had already recognized impairment of the corresponding right of use assets in a prior period.
(6)The quarter ended April 2, 2023 consists primarily of costs associated with restructuring of the global executive team.
(7)The quarters ended March 31, 2024 and April 2, 2023 consist primarily of legal and other regulatory expenses incurred outside the ordinary course of business. The regulatory expenses incurred in the quarter ended April 2, 2023 relate to previous business acquisitions.
(8)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the Condensed Consolidated Statements of Operations.
(9)Includes interest expenses related to unamortized debt issuance costs from the 2019 Facility associated with extinguished lenders as a result of the March 2023 debt refinancing.
(10)Tax impact of adjustments calculated applying the applicable statutory rates. The quarters ended March 31, 2024 and April 2, 2023 also include the impact of disallowed executive compensation expense.


(11)The quarter ended March 31, 2024 consists of the recognition of a previously unrecognized tax benefit unrelated to ongoing operations and a discrete tax benefit unrelated to ongoing operations. The quarter ended April 2, 2023 consists of a discrete tax benefit unrelated to ongoing operations.


Krispy Kreme, Inc.
Segment Reporting (Unaudited)
(in thousands, except percentages or otherwise stated)
 Quarter Ended
March 31, 2024April 2, 2023
Net revenues:
 
 
U.S.$295,935 $281,344 
International124,750 111,988 
Market Development22,013 25,618 
Total net revenues$442,698 $418,950 
Q1 2024 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first quarter of fiscal 2024$295,935 $124,750 $22,013 $442,698 
Total net revenues in first quarter of fiscal 2023281,344 111,988 25,618 418,950 
Total Net Revenues Growth14,591 12,762 (3,605)23,748 
Total Net Revenues Growth %5.2 %11.4 %-14.1 %5.7 %
Less: Impact of shop optimization program closures(316)— — (316)
Less: Impact of Branded Sweet Treats exit(5,367)— — (5,367)
Adjusted net revenues in first quarter of fiscal 2023275,661 111,988 25,618 413,267 
Adjusted net revenue growth20,274 12,762 (3,605)29,431 
Impact of foreign currency translation— (1,836)— (1,836)
Organic Revenue Growth$20,274 $10,926 $(3,605)$27,595 
Organic Revenue Growth %7.4 %9.8 %-14.1 %6.7 %
Q1 2023 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first quarter of fiscal 2023$281,344$111,988$25,618$418,950
Total net revenues in first quarter of fiscal 2022247,919104,49320,120372,532
Total Net Revenues Growth33,4257,4955,49846,418
Total Net Revenues Growth %13.5%7.2%27.3%12.5%
Less: Impact of shop optimization closures(3,187)——(3,187)
Adjusted net revenues in first quarter of fiscal 2022244,732104,49320,120369,345
Adjusted net revenue growth36,6127,4955,49849,605
Impact of acquisitions(3,080)—893(2,187)
Impact of foreign currency translation—5,779—5,779
Organic Revenue Growth$33,532$13,274$6,391$53,197
Organic Revenue Growth %13.7%12.7%31.8%14.4%





Trailing Four Quarters EndedFiscal Years Ended
Sales per Hub
(in thousands, unless otherwise stated)
March 31, 2024December 31, 2023January 1, 2023
U.S.:
Revenues$1,119,535 $1,104,944 $1,010,250 
Non-Fresh Revenues (1)
(4,003)(9,416)(38,380)
Fresh Revenues from Insomnia Cookies and Hubs without Spokes (2)
(395,102)(399,061)(404,430)
Sales from Hubs with Spokes720,430 696,467 567,440 
Sales per Hub (millions)4.9 4.9 4.5 
International:
Sales from Hubs with Spokes (3)
$502,393 $489,631 $435,651 
Sales per Hub (millions) (4)
10.2 10.0 9.7 
(1)Includes the exited Branded Sweet Treats business revenues.
(2)Includes Insomnia Cookies revenues and Fresh Revenues generated by Hubs without Spokes.
(3)Total International net revenues is equal to Fresh Revenues from Hubs with Spokes for that business segment.
(4)International sales per Hub comparative data has been restated in constant currency based on current exchange rates.



Krispy Kreme, Inc.
Global Points of Access (Unaudited)

Global Points of Access
Quarter EndedFiscal Year Ended
March 31, 2024April 2, 2023December 31, 2023
U.S.:
Hot Light Theater Shops229 228 229 
Fresh Shops71 67 70 
Cookie Bakeries277 239 267 
DFD Doors (2)
7,198 6,081 6,808 
Total7,775 6,615 7,374 
International:
Hot Light Theater Shops45 43 44 
Fresh Shops490 458 483 
Carts, Food Trucks, and Other (1)
16 16 16 
DFD Doors
4,202 3,319 3,977 
Total4,753 3,836 4,520 
Market Development:
Hot Light Theater Shops117 106 116 
Fresh Shops1,010 835 968 
Carts, Food Trucks, and Other (1)
30 28 30 
DFD Doors
1,129 990 1,139 
Total2,286 1,959 2,253 
Total Global Points of Access (as defined)14,814 12,410 14,147 
Total Hot Light Theater Shops391 377 389 
Total Fresh Shops1,571 1,360 1,521 
Total Cookie Bakeries277 239 267 
Total Shops2,239 1,976 2,177 
Total Carts, Food Trucks, and Other46 44 46 
Total DFD Doors12,529 10,390 11,924 
Total Global Points of Access (as defined)14,814 12,410 14,147 
(1)Carts and Food Trucks are non-producing, mobile (typically on wheels) facilities without walls or a door where product is received from a Hot Light Theater Shop or Doughnut Factory. Other includes a vending machine. Points of Access in this category are primarily found in international locations in airports, train stations, etc.
(2)Includes over 160 McDonald’s shops located in Louisville and Lexington, Kentucky and the surrounding area as of March 31, 2024.


Krispy Kreme, Inc.
Global Hubs (Unaudited)

Hubs
Quarter EndedFiscal Year Ended
March 31, 2024April 2, 2023December 31, 2023
U.S.:
Hot Light Theater Shops (1)
221 221 220 
Doughnut Factories4 4 4 
Total225 225 224 
Hubs with Spokes154 137 149 
Hubs without Spokes71 88 75 
International:
Hot Light Theater Shops (1)
36 34 36 
Doughnut Factories14 14 14 
Total50 48 50 
Hubs with Spokes50 48 50 
Market Development:
Hot Light Theater Shops (1)
113 103 112 
Doughnut Factories26 24 23 
Total139 127 135 
Total Hubs414 400 409 
(1)Includes only Hot Light Theater Shops and excludes Mini Theaters. A Mini Theater is a Spoke location that produces some doughnuts for itself and also receives doughnuts from another producing location.


Krispy Kreme, Inc.
Net Debt and Leverage (Unaudited)
(in thousands, except leverage ratio)

March 31, 2024December 31, 2023
Current portion of long-term debt$60,326 $54,631 
Long-term debt, less current portion881,778 836,615 
Total long-term debt, including debt issuance costs
942,104 891,246 
Add back: Debt issuance costs4,109 4,371 
Total long-term debt, excluding debt issuance costs
946,213 895,617 
Less: Cash and cash equivalents(33,132)(38,185)
Net debt$913,081 $857,432 
Adjusted EBITDA - trailing four quarters214,884 211,624 
Net leverage ratio4.2 x4.1 x

v3.24.1.u1
Cover Page Document
May 09, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 09, 2024
Entity Registrant Name Krispy Kreme, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40573
Entity Tax Identification Number 37-1701311
Entity Address, Address Line One 2116 Hawkins Street
Entity Address, City or Town Charlotte
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28203
City Area Code 800
Local Phone Number 457-4779
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol DNUT
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001857154
Amendment Flag false
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