Krispy Kreme, Inc. (DNUT) saw its stock price plummet by 5.06% in pre-market trading on Friday, following a week of significant declines. The drop comes on the heels of the company's disappointing first-quarter earnings report, which revealed a series of challenges facing the doughnut maker.

The company reported a 15.2% decline in revenue for Q1, with organic revenue down 1%. This performance fell short of market expectations, despite Krispy Kreme's continued expansion efforts, which saw a 21.4% increase in global points of access compared to last year. The softer-than-expected revenue per store, combined with increased costs from expansion, resulted in a severe 58.8% drop in adjusted EBITDA. More alarmingly, the company swung from an $11.3 million profit in the same quarter last year to an $8.8 million loss.

In response to these financial pressures, Krispy Kreme's management made the drastic decision to cut the company's $0.14 dividend to zero, a move that has further shaken investor confidence. The company also reported taking on more debt, with its total debt load growing to $935 million by the end of the quarter. Adding to investor concerns, Krispy Kreme announced a pause in its expansion into McDonald's restaurants for Q2, citing the need to "achieve a profitable business model for all parties." This development casts doubt on what was previously touted as a key growth driver for the company. While management has provided guidance for a slight improvement in Q2, the combination of ongoing losses, increased debt, and macroeconomic uncertainties continues to make Krispy Kreme a risky investment prospect.