Krispy Kreme KKD reported its fourth quarter earnings on Wednesday. Shares of the company are down 4%.
Below are some key highlights from the company's conference call:
New Executive Progress:
• The strength of the Krispy Kreme brand is even greater than I originally believed.
• I'm excited about the significant growth opportunity we have ahead of us.
• We have an extremely talented team committed to long-term success and I am
pleased to be working with them to delight our guests and drive shareholder
value.
• Our brand is all about a craveable, simple, fun, sharing experience with
doughnuts that are best-in-class.
• Our marketing, operating and culinary teams work tirelessly to
drive doughnut use occasions through social media and related marketing.
• Looking to our near-term agenda, we believe there is significant growth
opportunity in the doughnut category, but one of my top priorities is to
leverage.
• Expanding our beverage
platform so that coffee and other specialty drinks can play a larger role in
our total sales mix.
• As an example, we are currently testing Frozen Lattes in
some of our company shops.
Growth:
• System wide domestic same-store sales rose 2.8%, including a 1.1% increase at
company shops and 3.8% increase at franchise shops.
• Our domestic unit development is continuing to gain momentum and is beginning
to demonstrate the kind of growth rates that we've enjoyed in our
international franchise segment for many years.
• We grew our systemwide unit
count by 3.4% in the quarter and 6.8% year-to-date, adding a net total of 56
shops so far in fiscal 2015.
• As you know, earlier this year Krispy Kreme began testing packaged ground
coffee in Sam's Club and we introduced ready-to-drink Iced Coffees in over
1,000 Walmart stores.
• In addition, we've been working in our wholesale channel to expand product
assortment with longer shelf life items.
• We plan to introduce more of these
new product between now and the end of the year.
• Another focus area is continued development and deployment of technology to
improve our business.
• Following traffic softness in the first quarter, we used promotional
incentives to drive traffic and to acquire new customers.
Results:
• Total revenues increased 7% in the
quarter to just over $120 million.
• Operating income was $9.6 million compared
to $10.6 million
• Total on-premises sales
increased over 7% from last year and same-store sales at company shops rose
1.1%.
• With comps up 10.5% in the second quarter last year, we were pleased
with the two-year stack of 11.6%.
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