Donut chain Krispy Kreme unveils disappointing guidance, sending shares tumbling

Investing.com - Krispy Kreme (NASDAQ:DNUT) shares tumbled by more than 11% in premarket U.S. trading on Tuesday after the donut maker's annual sales and profit guidance missed analysts' expectations.

The group said it expects full-year net revenue to be between $1.55 billion and $1.65 billion, compared with Bloomberg consensus estimates of $1.76 billion. Adjusted earnings before interest, tax, depreciation and amortization are also tipped to be $180 million to $200 million, below projections of $233.1 million.

In a statement, CEO Josh Charlesworth noted that, along with an ongoing restructuring effort aimed at maximizing "profitable U.S. expansion and capital-light international growth," the company has begun to evaluate refranchising certain overseas markets.

"I believe these changes will drive capital efficient growth," Charlesworth said.

Meanwhile, total revenue in the fourth quarter sank by 10% versus the year-ago period to $404 million. Consensus expectations had seen the number at $414 million.

Adjusted core income also slumped by 28% year-on-year to $45.9 million in the three months ended on December 29, missing forecasts of $58.7 million.

Krispy Kreme had previously warned in December that unauthorized activity on a section of its information technology systems had impacted its online ordering operations in the U.S. Online ordering, retail shops, and core business functions are now fully operational, the business said.

The breach dented fourth-quarter results by an estimated $11 million, the company said. Meanwhile, the sale of a majority ownership stake in bakery firm Insomnia Cookies in the third quarter led to a $101 million impact on Krispy Kreme's returns, it added.