On August 8, 2024, Krispy Kreme Inc (DNUT, Financial) released its 8-K filing for the second quarter of 2024, showcasing a mixed performance with notable revenue growth but a net loss. The company, renowned for its Original Glazed doughnut, operates through a network of fresh Doughnut Shops, retailer partnerships, and a growing ecommerce and delivery business.
Performance Overview
Krispy Kreme Inc (DNUT, Financial) reported a 7.3% increase in net revenue, reaching $438.8 million, surpassing the analyst estimate of $435.49 million. However, the company posted a GAAP net loss of $4.9 million, translating to a loss per share of $0.03, which missed the analyst estimate of -$0.02 per share. Adjusted EBITDA grew by 12.1% to $54.7 million, with an adjusted EBITDA margin improvement of 60 basis points to 12.5%.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Revenue | $438.8 million | $408.9 million | 7.3% |
| GAAP Net (Loss)/Income | $(4.9) million | $0.1 million | nm |
| Adjusted EBITDA | $54.7 million | $48.8 million | 12.1% |
| Adjusted Diluted EPS | $0.05 | $0.07 | $(0.02) |
Segment Performance
U.S. Segment: Net revenue grew by 8.2% to $289.3 million, driven by a 24% increase in Delivered Fresh Daily (DFD) sales and a 26% increase in digital sales. Adjusted EBITDA increased by 16.3% to $32.7 million, with a margin expansion of 80 basis points to 11.3%.
International Segment: Net revenue increased by 3.9% to $125.3 million, with organic revenue growth of 5.0%. However, Adjusted EBITDA decreased by 12.3% to $21.7 million, primarily due to softer transaction volumes in the U.K.
Market Development Segment: Net revenue and organic revenue both increased by 16.1%, driven by higher equipment sales. Adjusted EBITDA grew by 22.7% to $12.9 million, with a margin expansion of 280 basis points to 53.1%.
Financial Position and Cash Flow
During Q2 2024, Krispy Kreme Inc (DNUT, Financial) generated GAAP operating cash flow of $33.2 million and invested $31.7 million in capital expenditures, primarily for the U.S. expansion of the DFD network. This resulted in a positive free cash flow of $1.6 million. The company also received $127.4 million from the sale of a majority stake in Insomnia Cookies and an additional $45 million from refinancing intercompany debt.
Guidance Update
Krispy Kreme Inc (DNUT, Financial) updated its 2024 guidance to reflect the sale of a majority stake in Insomnia Cookies. The company now expects net revenue between $1,650 million and $1,685 million, organic revenue growth of 5% to 7%, and adjusted EBITDA between $215 million and $220 million. Adjusted diluted EPS is projected to be between $0.24 and $0.28.
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Explore the complete 8-K earnings release (here) from Krispy Kreme Inc for further details.
