Tags: Krispy | Kreme | Profit | Investors

Krispy Kreme's Profit Leaves Investors with Bellyache

Thursday, 29 Aug 2013 06:03 PM

Shares of Krispy Kreme Doughnuts Inc., the chain that revived itself by expanding beyond doughnuts into coffee and smoothies, fell sharply after the company reported second-quarter profit that trailed analysts’ estimates as costs rose.

The shares were down 13 percent at $20.20 at 6 p.m. New York time in extended trading. The Winston-Salem, North Carolina-based company's stock had more than doubled this year through the close of trading Thursday in New York, while the Standard & Poor’s 500 Index has increased 15 percent.

Net income fell 4.3 percent to $4.72 million, or 7 cents a share, in the three months ended Aug. 4, compared with $4.93 million, or 7 cents a share, last year, Krispy Kreme said in a statement. Excluding certain items, profit was 14 cents a share. Analysts estimated 16 cents, according to the average of projections compiled by Bloomberg.

The chain has tried to lure customers from Starbucks Corp. and other coffee sellers by selling fancier coffee drinks such as lattes and caramel mochas. It’s also opening smaller factory stores that don’t make doughnuts on the premises and are cheaper to build.

General and administrative costs rose 19 percent to $5.66 million in the quarter from last year. Krispy Kreme also saw unexpectedly higher health-care expenses for employees, Chief Financial Officer Douglas Muir said on a conference call.

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Shares of Krispy Kreme Doughnuts Inc. fell sharply after the company reported second-quarter profit that trailed analysts' estimates as costs rose.
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2013-03-29
Thursday, 29 Aug 2013 06:03 PM
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