Krispy Kreme Doughnuts (NYSE: KKD) reported results for the second quarter on Thursday after the bell. I haven't been a huge fan of this company, but I will concede that some of the data in the release is interesting. Maybe even encouraging.

The same-store sales went up 5.9% -- they were terrible last year at this time. Same-store sales are, as we all know, a very key metric for a business like Krispy Kreme. And the performance served as a positive counterargument to the 12% decrease in the top line.

Continue reading Krispy Kreme improves comps in Q2

Krispy Kreme improves comps in Q2 originally appeared on BloggingStocks on Fri, 04 Sep 2009 08:30:00 EST. Please see our terms for use of feeds.

Krispy Kreme Doughnuts' (NYSE: KKD) stock has had a nice run of late. It's doubled so far on the year-to-date frame. Is there something to this story? Before, there was nothing. Krispy Kreme has been a very troubled business, and it would be very difficult to convince me otherwise. But, have things changed?

Well, net income did drop in Q1. Krispy Kreme said it made t $0.03 per share. Last year at this time, the doughnut guru earned $0.06 per share. Although the profit decline isn't attractive, I liked the comps. Same-store sales at company locations increased over 2%.

Continue reading Krispy Kreme's stock is up this year -- buy after Q1 report?

Krispy Kreme's stock is up this year -- buy after Q1 report? originally appeared on BloggingStocks on Thu, 04 Jun 2009 16:20:00 EST. Please see our terms for use of feeds.

Continue reading The Coffee Stock: Five-cent coffees at Krispy Kreme franchises a sign of old-fashioned smarts

The Coffee Stock: Five-cent coffees at Krispy Kreme franchises a sign of old-fashioned smarts originally appeared on BloggingStocks on Mon, 20 Oct 2008 17:54:00 EST. Please see our terms for use of feeds.

A private equity group unfamiliar to the stock market world claims to have made a bid to acquire struggling donut maker Krispy Kreme (NYSE:KKD). According to The Winston-Salem Journal, MGL Asset Management Group has offered $7.25 a share for the company, a premium of almost $2 a share over its closing price Monday.

The mystery surrounding MGL, its assets, ownership and ambitions have caused some to meet the proposal with skepticism. The company provides almost no information on its web site, and its spokesperson told the Journal that the bid was legit, but declined to elaborate.

The skepticism about this offer seems to stem from the wisdom and timing of such an acquisition. Although KKD just reported its first profitable quarter in over three years, overall, since selling in the $50 range before the carb craze, it has waffled ever since below the $10 mark, bottoming out at $2.50 a share just last November.

At a shareholder meeting recently, the CEO of Krispy Kreme reiterated the company's plans to build international business and increase the range of snack foods sold in convenience stores. Neither option, in my opinion, is likely to have a strong impact on the company's bottom line in the near future, if at all. One profitable quarter after three and a half years of losses in a company with a tired brand doesn't whet my appetite.

I wonder what drives MGL's interest? Perhaps they're looking at the hole picture, with a glazed look in their eyes.

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Equity firm dunking fund into Krispy Kreme originally appeared on BloggingStocks on Tue, 01 Jul 2008 11:01:00 EST. Please see our terms for use of feeds.

Krispy Kreme Doughnuts bids adieu to its chief and to trans fat originally appeared on BloggingStocks on Mon, 07 Jan 2008 16:19:00 EST. Please see our terms for use of feeds.

Shares of doughnut chain Krispy Kreme (NYSE: KKD) are surging today as the company reported its loss had narrowed to $798,000, or 1 cent a share, in the third quarter ended October 28, from $7.2 million, or 12 cents a share, a year earlier. For the last four years the Krispy Kreme stock has been as tasty for investors as a week-old doughnut lying around uncovered. After trading in the upper $40s a few years ago, the stock has been hit by healthier eating trends, mismanagement, and even bankruptcy by some of its franchisees.

For full disclosure, I try my best to help the stock, as I buy the doughnuts whenever possible, as I think they are awesome. For me, nothing's like a glazed Krispy Kreme.

Notwithstanding today's surge in the stock, the outlook for the company is murky at best. It said that there will be more store closures which will impact revenues. Its balance sheet is nothing to write home about either. As of October 28, the company had about $23 million in cash on its balance sheet, and $88 million in debt. It had about $11 million in additional debt capacity available under its credit facilities.

While I probably wouldn't get near the stock until we see continued evidence of a turnaround in their financials, I would jump at the chance of getting another dozen to eat while I write my next few posts! What's your favorite flavor?

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/6/07.

Krispy Kreme filling holes in balance sheet originally appeared on BloggingStocks on Thu, 06 Dec 2007 15:11:00 EST. Please see our terms for use of feeds.

Continue reading Funny bidness -- US Airways passengers can't drink over NM

Funny bidness -- US Airways passengers can't drink over NM originally appeared on BloggingStocks on Wed, 21 Nov 2007 16:30:00 EST. Please see our terms for use of feeds.

Continue reading CIBC World Markets downgrades Krispy Kreme (KKD)

CIBC World Markets downgrades Krispy Kreme (KKD) originally appeared on BloggingStocks on Mon, 10 Sep 2007 18:04:00 EST. Please see our terms for use of feeds.

Shares of Krispy Kreme (NASDAQ: KKD) tanked more than 38% today after the beleaguered donut chain reported a terrible quarter.

Revenue fell 7.5%, and the company lost $27 million, compared with $4.6 million in the same quarter of last year. Results were hurt by impairment charges and lease termination costs as the company closes underperforming locations. The shares closed at their low for the day, $3.91, which is roughly the lowest the shares have traded in the company' history. The stock had traded at over $12 as recently as January.

Analysts quoted in the latest AP coverage of this mess have a hard time being optimistic. As BB&T Capital Markets analyst Andrew P. Wolf said, "the nascent turnaround at the company has (at best) stalled."

Hmm. Krispy Kreme's CEO Daryl Brewster talked about the company's turnaround plans, and added that "The only things nonnegotiable are our consumers, our brand and our quality."

But the company's overly-aggressive expansion may have hurt its brand and quality: Are donuts available at grocery stores and kiosks really something you associate with a premium brand?

It's great that the current management is focused on the brand, but overexpansion may hurt that image beyond repair. And although takeover rumors have surrounded the company since its decline began, it really doesn't look all that cheap, even after the decline.

In a blog post today, MarketWatch's Herb Greenberg wonders about the company's solvency: "Especially troubling is the company's concession that for the six months it's not in compliance with EBITDA covenants with its lenders -- not good when cash and cash flow are going down, as is the case at Krispy Kreme."

Restructuring would appear to be a real possibility at some point, and dieters as well as investors would do probably do well to avoid Krispy Kreme for now.

Krispy Kreme (KKD) shares lose a few pounds originally appeared on BloggingStocks on Fri, 07 Sep 2007 18:15:00 EST. Please see our terms for use of feeds.

Have you had your fruit (product) today? originally appeared on BloggingStocks on Mon, 09 Jul 2007 15:14:00 EST. Please see our terms for use of feeds.

Krispy Kreme Doughnuts (NYSE: KKD) announced today that it will be launching a new "Multigrain cake doughnut made with seven grains and topped with an oatmeal crisp crunch. For a limited time, customers can enjoy this delicious treat made with molasses, brown sugar and pecan flavors."

The doughnut will debut on July 9, but the announcement doesn't appear to have budged Krispy Kreme's shares, a fact lamented by MarketWatch this morning: "Once upon a time, Krispy Kreme could generate levels of media hype close to those that Apple manages for every gizmo launch. Sadly for the doughnut maker's shareholders, however, those days are long gone."

So too is most of Krispy Kreme's shareholder value since it soared into the $40's a few years ago. Accounting and management scandals along with overly-aggressive expansion have let most out of the air out of this once-hot growth darling. But there may be a reason for optimism.

The company's largest shareholder, Mohamed Abdulmohsin Al Kharafi & Sons WLL, a Kuwaiti-based firm led by the Al Kharafi family, has increased its stake 20% recently, and now controls 11.4% of the company. The confidence of a large shareholder (which also agreed to a deal to develop franchises in the Middle East) might be a reason to at least give Krispy Kreme a look.

But as far as the shares have fallen since their heyday, they still don't look that cheap at 1.28 times sale for a company that isn't profitable.

Krispy Kreme offers new multigrain doughnut -- but its value is still in the hole originally appeared on BloggingStocks on Wed, 27 Jun 2007 15:45:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Mohamed Abdulmohsin Al Kharafi & Sons WLL, a Kuwaiti-based firm led by the Al Kharafi family, recently bought 1.25 million shares of Krispy Kreme Doughnuts Inc (NYSE: KKD) and now owns 7.37, or 11.4% of Krispy Kreme, according to Barron's Online's "Inside Scoop" section.
• The board of Dow Jones & Company Inc (NYSE: DJ) is taking over talks on the company's future, reported the Wall Street Journal, which added in a different article that Brad Greenspan, the former CEO of MySpace says he will seek a non-controlling stake in Dow Jones through a $60-per-share Dutch auction.
• The Wall Street Journal reported that the London Exchange is discussing a possible merger with Italian stock exchange operator Borsa Italiana.

• The Telegraph reported that state-run Russian gas company Gazprom (OTC: OGZPY) wants to nix an Exxon Mobil Corporation (NYSE: XOM)-led project to supply Russian gas to China.
• The Telegraph also reported that Vodafone Group plc (NYSE:VOD) will have to pay about $900 million to avoid having its stake in Verizon Wireless reduced by 1%, as joint venture partner Verizon Communications Inc (NYSE: VZ) has the right to increase its share to 56% from 55% if Vodafone does not pay the additional money.

Newspaper wrap-up 6-21-07: More Dow Jones headlines originally appeared on BloggingStocks on Thu, 21 Jun 2007 09:15:00 EST. Please see our terms for use of feeds.

In October 2000, Amey Stone -- then Associate Editor of BusinessWeek Online and now of BloggingStocks -- co-wrote an article about the KREMEY (Krispy Kreme Euphoria Yardstick) which compared the fate of $5,400, invested in 10 high profile dot-com stocks, with Krispy Kreme Doughnuts, Inc. (NYSE: KKD) which went public in April 5, 2000. Since then, the 10 stocks have tumbled 44%, while Krispy Kreme is down 23%.

Krispy Kreme is losing more money, according to The Wall Street Journal [subscription required]. The company makes great-tasting doughnuts. And since I was quoted in that October 2000 article I've learned more about how the human body metabolizes doughnuts. It initially releases a rush of insulin to digest all the sugar and carbohydrates in the doughnut. Following that sugar rush, people get listless and hungry.

This metabolic trajectory mirror's that of Krispy Kreme's stock chart. But since February 2005 when there were fears the company would file for bankruptcy, the stock has had a nice recovery. Meanwhile, of the 10 dot-com stocks on that April 5, 2000 list, three no longer exist as publicly-traded stocks -- AOL, eToys, and iVillage.com -- and the remaining seven are down an average of 44% -- as detailed below.

Continue reading How the KREMEY have fallen

How the KREMEY have fallen originally appeared on BloggingStocks on Tue, 05 Jun 2007 11:21:00 EST. Please see our terms for use of feeds.

On May 26, 2006, I blogged about the decline of what was once a solid brand -- Krispy Kreme Doughnuts (NYSE:KKD). At the time, I said it was full of holes -- closing stores, franchisees bankrupted, a government investigation starting. But I also pointed to the new CEO, Daryl Brewster, who analysts were hoping might revitalize the company. KKD was $10 a share then. Today, nearly a year later, it is still floundering at nearly the same price.

In The Business Journal earlier this month, Brewster was reported as saying, "We kind of call it going from survival mode, which we were clearly in a year ago, to stability, which we think we're approaching .... But at the same time, (we're) really building and driving toward sustained growth as we go forward."

Out of survival mode, maybe, but out of the weeds? I'm not so sure. That said, Krispy Kreme is trying -- in February, it announced a new whole wheat donut. (I'd argue that if you're buying a donut, you aren't really thinking about health foods to begin with, so this is pretty misguided product development!) It is expanding through franchises abroad and designing cheaper, smaller stores. It has recently refinanced its debt as part of an overall cost-cutting mission, and it's resolved most of its accounting and legal problems.

Wall Street analysts are not walking away yet -- many of them see ongoing hope under Brewster. I still don't see too much hope in Krispy Kreme though -- there's simply too much competition with places like Dunkin' Donuts, and what had made KKD unique was its boutique, hard-to-find feel -- which was long ago destroyed. In fact, Dunkin' Doughnuts has hired Rachel Ray, the "hip" celebrity chef, to appear in ads for Dunkin' Doughnuts and the chain is making a concerted effort to grow its appeal with a fresher look. All of this will make it harder for Krispy Kreme to make a comeback.

Continue reading Krispy Kreme Doughnuts: A sweet acquisition?

Krispy Kreme Doughnuts: A sweet acquisition? originally appeared on BloggingStocks on Mon, 26 Mar 2007 09:30:00 EST. Please see our terms for use of feeds.

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• CIBC resumed coverage of Krispy Kreme Doughnuts Inc (NYSE: KKD) with a Sector Performer rating, up from its recent Underperformer rating, citing resolutions to numerous accounting and legal issues for the upgrade.

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Analyst upgrades 3-01-07: Krispy Kreme, Apple and ExxonMobil upgraded today originally appeared on BloggingStocks on Thu, 01 Mar 2007 11:27:00 EST. Please see our terms for use of feeds.

Krispy Kreme introduces healthy donut -- is KKD healthier? originally appeared on BloggingStocks on Tue, 27 Feb 2007 10:28:00 EST. Please see our terms for use of feeds.

Continue reading Valentine doughnuts: Krispy Kreme cares about your heart

Valentine doughnuts: Krispy Kreme cares about your heart originally appeared on BloggingStocks on Sat, 03 Feb 2007 14:47:00 EST. Please see our terms for use of feeds.

Cramer likes carbs: Krispy Kreme delicious, he says originally appeared on BloggingStocks on Mon, 06 Nov 2006 18:27:00 EST. Please see our terms for use of feeds.

Continue reading Krispy Kreme: don't waste your kash

Krispy Kreme: don't waste your kash originally appeared on BloggingStocks on Tue, 31 Oct 2006 11:50:00 EST. Please see our terms for use of feeds.