- Krispy Kreme topped Wall Street’s estimates for its third-quarter revenue and met expectations for its adjusted earnings per share.
- CEO Mike Tattersfield said the company has pricing power because customers are willing to spend more on fresh donuts.
- Krispy Kreme raised prices in September and plans to raise them further in the fourth quarter.
Krispy Kreme’s third-quarter revenue climbed 18%, boosted by higher prices on its fresh donuts, which helped the chain offset rising commodity and labor costs.
Shares rose more than 4% in extended trading on Tuesday.
CEO Mike Tattersfield said in an interview that customers are willing to spend more on fresh donuts. In recent years, the company shifted its business to delivering fresh donuts every day in its stores. But its pricing power also comes when people buy treats.
“Since we are a dozen businesses, we have a lot of flexibility in pricing,” Tattersfield said. “…we’re not a high-frequency brand. People are still going to celebrate, so they look at business like ‘Yeah, I want to make sure we can get fresh donuts from Krispy Kreme.’ ,
Tattersfield said customers are willing to pay 50% more for special donuts.
Krispy Kreme raised prices in September and plans to raise them further in the fourth quarter. Tattersfield declined to provide details about how much customers are paying.
For the fiscal third quarter ended October 3, Krispy Kreme said its net loss attributable to the company narrowed its net loss of $5.7 million, or 4 cents per share, from a year earlier of $14.9 million, or 12 cents per share.
Excluding items, the company posted earnings of 6 cents per share, in line with analysts’ expectations.
Net sales for the quarter reached $342.8 million, beating Wall Street’s expectations of $337.7 million, according to a poll of analysts by Refinitiv.
Excluding Krispy Kreme’s exit from the wholesale business, organic revenue climbed 14% from a year ago and 22% on a two-year basis. The company also owns the cookie chain Insomnia Cookies.
Krispy Kreme reiterated its outlook for the rest of 2021. It is forecasting net revenue of $1.34 billion to $1.38 billion and organic revenue growth of 10% to 12%. The company is also expecting adjusted net income of $62 million to $68 million.
This is the second quarter that Krispy Kreme has shared its results since returning to the public markets in July. Since its initial public offering, the stock is down 39%, giving it a market value of $2.18 billion. Shares closed down more than 4% on Tuesday.