Krispy Kreme Doughnuts Lifts Earnings Outlook But Shares Fall (KKD)
Krispy Kreme Doughnuts (NYSE: KKD) reported late last evening that its fiscal fourth-quarter profits plunged 97% year-on-year due to unfavorable comparables. Last year, the company’s bottom line received a huge boost due to tax benefits.
Although fourth quarter revenue edged past analysts’ expectation with comparable stores showing improvement and earnings guidance on the current quarter was lifted , shares fell in afterhours trading as earnings fell short of Street’s estimate.
For the current fiscal, the company upwardly revised its earnings guidance to 53 cents to 57 cents a share from 49 cents to 55 cents a share.
In spite of consumers opting for healthier eating habits, the Winston-Salem, North Carolina-based Company, which operates more than 700 stores, has been witnessing sequential growth in quarterly revenue since last two years. Addition of coffee and other beverages have helped to improve the customers’ traffic at its stores. In addition, the Company in order to gain traction in international markets entered a deal with Star360 Group towards the end of the last year, setting up doughnuts stores in Singapore.
For the fiscal fourth quarter ended Feb. 3, Krispy Kreme reported a profit of $4.8 million, or 7 cents a share, compared to a profit of $143.5 million, or $2.01 a share, in the year-earlier quarter.
In the same period of last year, net profit included a onetime gain of $139.6 million linked to a reversal of valuation allowances on deferred income tax assets.
Stripping out onetime items, adjusted or non-GAAP earnings came at 9 cents a share, up from 6 cents a share.
Revenue soared 16% to $118.1 million.
Analysts polled by Thomson Reuters had most recently forecasted earnings of 12 cents a share on revenue of $116 million.
Same-store sales increased by 7.5% while franchise same-store sales soared 9.6% in the U.S., but declined 7.4% in international markets.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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