Krispy Kreme Considers Selling Insomnia Cookies Business For The Love Of Fresh Doughnuts

Krispy Kreme Inc DNUT is exploring strategic alternatives for Insomnia Cookies, which includes an all-cash sale consideration.

Insomnia Cookies, which serves warm cookies all day and late into the night, has tripled its revenue since 2017 and currently operates in three countries with over 250 bakeries. 

The company bought a majority stake in Insomnia Cookies in 2018 and expects it to generate revenues of about $230 million in FY23. 

The company's move reflects its aim to focus on the core strategy of producing, selling, and offering fresh doughnuts.

"Krispy Kreme has expanded rapidly through our capital light omni-channel model, and the brand is now in 37 countries selling fresh doughnuts through nearly 13,000 points of access daily. Looking ahead, our goal is to expand to more than 75,000 points both by entering 3-5 new countries each year and developing new channels like quick service restaurants," stated Mike Tattersfield, CEO.

Last month, Krispy Kreme appointed Josh Charlesworth as President and Chief Executive Officer, effective January 1, 2024.

In August, the company reported Q2 FY23 sales growth of 9% year-on-year to $408.88 million, missing the analyst consensus of $410.83 million, and adjusted EPS of $0.07 was in line with the consensus.

As of July 2, 2023, the company held $26.97 million in cash and cash equivalents.

Price Action: DNUT shares are trading higher by 0.32% at $12.47 on the last check Tuesday.