By Denny Jacob
Krispy Kreme withdrew its outlook for the year and said it will stop paying a quarterly dividend, making it the latest company to exercise a more cautious approach in an uncertain economic climate.
Chief Executive Josh Charlesworth on Thursday said the company is focusing on certain priorities, including positive cash flow and profitable expansion in the U.S.
In addition to the macro environment, the Charlotte, N.C., doughnut chain cited uncertainty around its deployment schedule with McDonald's after it entered into a partnership with the fast-food giant earlier in the year.
Shares tumbled 19.4% to $3.49 in premarket trading. The stock is down 56% on the year as of Wednesday's close.
Krispy Kreme said that while its doughnuts are available in more than 2,400 McDonald's locations, it's reassessing the deployment schedule while it works to achieve a profitable business model for both parties. It added that it doesn't expect to launch in any additional restaurants in the second quarter.
For the second quarter, the Charlotte, N.C., company guided for revenue between $370 million and $385 million. Analysts polled by FactSet expected $393.9 million.
Krispy Kreme also said it would no longer pay a quarterly cash dividend to common-stock holders as it looks to have greater financial flexibility to pay off debt and focus on profitable, higher return growth.
In the January-to-March period, Krispy Kreme widened its loss to $33.3 million, or 20 cents a share, compared with its loss of $8.5 million, or 5 cents a share, in the prior-year period.
Stripping out certain one-time items, the loss came in at 5 cents a share, matching analysts' estimates.
Revenue declined 15% to $375.2 million from $442.7 million a year earlier. Analysts expected $384.4 million.
Krispy Kreme said the top-line decline was primarily due to a roughly $64 million reduction associated with its divestiture of a majority stake in Insomnia Cookies in the third quarter of fiscal 2024.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
May 08, 2025 07:25 ET (11:25 GMT)
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