American doughnut company Krispy Kreme has reported a net loss of $5.49m for the second quarter (Q2) of 2024, a stark contrast to the net income of $223,000 in the same period of 2023.
Despite the loss, the company saw an increase in net revenues to $438.81m, up from $408.88m in Q2 2023. Product sales also rose to $429.41m from $400.35m.
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Operating expenses for the quarter increased to $212.5m from $189.17m, with a rise in selling, general and administrative expenses to $64.47m from $62.58m.
Operating income saw a slight improvement to $6.86m from $5.65m, but this was offset by a higher net interest expense, which grew to $14.45m from $12.06m.
The US segment reported a revenue increase of 8.2%, with a notable 24% rise in delivered fresh daily (DFD) sales and a 26% increase in digital sales.
The US adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) grew by 16.3% to $32.7m, benefiting from labour and waste optimisation and productivity gains from the hub and spoke model.
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By GlobalDataThe international segment saw a 3.9% increase in net revenue, with organic revenue growing by 5% due to a significant 39% increase in points of access (POA). However, international adjusted EBITDA fell by 12.3% to $21.7m, with a notable decline in transaction volumes in the UK.
In the market development segment, net revenue and organic revenue rose by 16.1%, driven by higher equipment sales compared to the previous year. Adjusted EBITDA in this segment increased by 22.7% to $12.9m.
For the first half (H1) of 2024, Krispy Kreme’s attributable net loss was $14.03m, compared to a net loss of $78,000 in the previous year.
The company’s net revenues during H1 2024 rose to $881.51m from $827.83m in the same period of 2023.
However, operating income in H1 decreased to $18.77m from $20.59m, despite a reduction in product and distribution costs and an increase in product sales.
Krispy Kreme CEO Josh Charlesworth said: “Krispy Kreme had another strong quarter as our fresh doughnuts are becoming even easier to purchase and more available globally.
“Our innovative speciality doughnut collections continue to resonate with consumers and drove increased DFD and digital sales in the quarter.
“Our points of access also grew, and we’re excited about upcoming launches in Germany, Brazil and our recent announcements of entries into Spain and Morocco.”
“In the US, our profitable nationwide expansion is accelerating as we grow with existing customers and add new national partners. This includes the nationwide rollout to McDonald’s, starting this fall in the Midwest with Chicago.”
“The recent sale of a majority stake in Insomnia Cookies allows us to focus on our core strategy of producing, selling and distributing fresh doughnuts daily whilst also further improving our financial profile,” he concluded.
