Krispy Kreme’s third quarter was marked by a positive market reaction as the company showed early progress on its turnaround plan. Management attributed improved profitability to a strategic exit from underperforming U.S. locations, the end of its McDonald’s partnership, and ongoing cost-saving efforts. CEO Josh Charlesworth described the period as a “turnaround plan to deleverage the balance sheet and deliver sustainable, profitable growth,” while noting that operational changes and targeted store closures led to higher average sales per location. The company also benefited from digital channel growth and successful limited-time product campaigns, which helped offset broader revenue declines.
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Krispy Kreme (DNUT) Q3 CY2025 Highlights:
- Revenue: $375.3 million vs analyst estimates of $378.2 million (1.2% year-on-year decline, 0.8% miss)
- Adjusted EPS: $0.01 vs analyst estimates of -$0.05 (significant beat)
- Adjusted EBITDA: $40.6 million vs analyst estimates of $28.33 million (10.8% margin, 43.3% beat)
- Operating Margin: -1.9%, up from -4.2% in the same quarter last year
- Locations: 14,851 at quarter end, down from 15,811 in the same quarter last year
- Market Capitalization: $690.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Krispy Kreme’s Q3 Earnings Call
- Daniel Guglielmo (Capital One Securities) asked about international momentum and DFD (delivered fresh daily) expansion. CFO Raphael Duvivier confirmed continued growth in markets like Mexico, Japan, and Brazil, emphasizing lessons learned from the U.S. hub-and-spoke model will inform international rollout.
- Brian Harbour (Morgan Stanley) requested insight on U.S. demand and cost initiatives. CEO Josh Charlesworth explained that exiting low-performing doors led to improved sales per location, and Duvivier highlighted sequential EBITDA gains with further cost discipline to come.
- Sara Senatore (Bank of America) inquired about the impact of fully outsourcing U.S. delivery. Charlesworth said the shift brings more predictable logistics costs now, with long-term benefits expected from partners’ technology and fleet management expertise.
- Rahul Krotthapalli (JPMorgan) asked about the competitive landscape and distribution strategy. Charlesworth stated that Krispy Kreme’s focus is on high-traffic, high-visibility locations and that the program to exit low-traffic doors is complete, with future growth targeting proven partners like Target and Costco.
- Alexandra Gaillard (BNP, via Jaafar Mestari) sought clarity on sequential EBITDA improvement. Duvivier confirmed expectations for higher EBITDA and positive cash flow in the next quarter, reiterating ongoing CapEx reductions.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) successful execution of the refranchising and capital-light initiatives, (2) the impact of full logistics outsourcing on cost structure and profitability, and (3) sustained momentum in international markets, especially as new geographies come online. Additional attention will be paid to digital channel expansion and the performance of new product offerings as indicators of brand engagement and market share resilience.
Krispy Kreme currently trades at $4.04, up from $3.79 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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