Shares of Krispy Kreme dropped by more than 13% following disappointing second-quarter sales. The doughnut distributor faced challenges due to a disruption caused by a third-party point-of-sale provider.
Stock Decline and Performance Highlights
The stock fell 13.5% to $12.46 during afternoon trading. Despite this decline, shares have still seen a year-to-date increase of almost 21%, surpassing the gain of 16% for the S&P 500.
Second-Quarter Sales and Analyst Expectations
Krispy Kreme reported second-quarter sales of $408.9 million, a 9% increase compared to the previous year. However, this figure fell short of analysts’ expectations of $410.7 million according to FactSet.
Explanation from CFO Jeremiah Ashukian
During a conference call with analysts, Chief Financial Officer Jeremiah Ashukian explained that the company experienced difficulties at the start of the quarter due to a disruption caused by a POS provider. This disruption affected Krispy Kreme’s ability to effectively execute promotions and manage labor. Ashukian also mentioned that the company is currently in the process of filing an insurance claim related to the incident, which lasted for four to six weeks.
Second-Quarter Profit Results
Krispy Kreme posted a second-quarter profit of $223,000, resulting in breakeven earnings on a per-share basis. This is a significant improvement compared to the loss of $3.85 million, or 2 cents per share, reported during the same period last year. Adjusted profit came in at 7 cents per share, in line with analysts’ estimates.
