On February 25, 2025, Krispy Kreme Inc (DNUT, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year ending December 29, 2024. The company, known for its iconic Original Glazed doughnuts, operates through a network of Doughnut Shops, retail partnerships, and a growing ecommerce and delivery business. Krispy Kreme's operations are divided into three segments: U.S., International, and Market Development, with the U.S. segment generating the most revenue.
Quarterly and Annual Performance
For the fourth quarter of 2024, Krispy Kreme reported net revenue of $404.0 million, a 10.4% decline from the previous year's $450.9 million, missing the analyst estimate of $415.45 million. The decline was primarily due to the sale of a majority stake in Insomnia Cookies and the impact of a cybersecurity incident. Organic revenue grew by 1.8% to $400.6 million, despite an adverse impact of 280 basis points from the cybersecurity issue.
The company reported a GAAP net loss of $22.2 million for the quarter, compared to a net income of $1.9 million in the same period last year. The diluted loss per share was $(0.13), falling short of the estimated earnings per share of $0.02.
Full Year Financial Achievements
For the full year 2024, Krispy Kreme's net revenue was $1.67 billion, a slight decrease from $1.69 billion in 2023. Organic revenue grew by 5.0%, driven by global expansion and strategic pricing actions. The company achieved a GAAP net income of $3.8 million, a significant improvement from a loss of $36.6 million in the previous year. The diluted earnings per share were $0.02, falling short of the annual estimate of $0.18.
Adjusted EBITDA for the year was $193.5 million, down 8.6% from 2023, impacted by the Insomnia Cookies divestiture and the cybersecurity incident. The company's global points of access increased by 24.1% to 17,557, reflecting its expanding footprint.
Segment Performance and Challenges
In the U.S. segment, net revenue declined by 17.2% due to the Insomnia Cookies sale and the cybersecurity incident. However, the Delivered Fresh Daily (DFD) business showed growth. The International segment saw a 5.7% increase in net revenue, driven by expansion and premiumization efforts. The Market Development segment experienced a 14.2% decline in net revenue, but Adjusted EBITDA grew by 6.8% due to a favorable sales mix.
Financial Metrics and Analysis
Key financial metrics include a GAAP operating cash flow of $45.8 million for the year and capital expenditures amounting to 7.25% of revenue. The company's balance sheet showed total assets of $3.07 billion, with a reduction in supply chain financing liabilities by $44.3 million.
The cybersecurity incident had a notable impact, with estimated lost revenue of $11 million and a $10 million impact on Adjusted EBITDA. The company incurred $3 million in remediation expenses and expects ongoing costs related to the incident in 2025.
“We delivered an 18th consecutive quarter of year-over-year organic sales growth. Excluding the estimated cybersecurity incident impact, results were largely in line with our expectations,” said Josh Charlesworth, Krispy Kreme CEO.
Conclusion
Krispy Kreme Inc (DNUT, Financial) faced significant challenges in 2024, including a cybersecurity incident and strategic divestitures, impacting its financial performance. However, the company demonstrated resilience through organic revenue growth and strategic expansion efforts. As Krispy Kreme continues to align its operations with business priorities, it aims for capital-efficient growth and transformation into a larger, more robust entity.
Explore the complete 8-K earnings release (here) from Krispy Kreme Inc for further details.
