Krispy Kreme Gains as Price Hikes, More Locations Drive Q4 Beat

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Krispy Kreme Gains as Price Hikes, More Locations Drive Q4 Beat
Credit: © Reuters.

By Dhirendra Tripathi – Krispy Kreme (NASDAQ: DNUT ) stock traded 1.4% higher in premarket Tuesday after price hikes and more purchase points for the customers helped it surpass fourth quarter estimates.

The company said it faced wage and commodity inflation in the period, but price increases in September and November more than offset those headwinds.

In the last 12 months, Krispy Kreme added over 2,000 spots for its customers to buy its doughnuts, and this also helped its topline beat estimates as well as expand margins.

Net revenue rose nearly 14% to $371 million. Total organic revenue growth for the fourth quarter, excluding the exit from the legacy wholesale business, grew almost 20%.  

The company said sales from Insomnia Cookies were strong in U.S. and Canada. It also attributed the gains to its hub and spoke model that allows it to deliver fresh doughnuts that customers like.

International sales drove the sales, rising 26% to $90 million. Limited offers helped internal sales, the company said. Growth was strong across all the markets, including the U.K., Mexico, Australia, and New Zealand.

Krispy Kreme is now expecting its 2022 net revenue to grow 11-13% to $1.53 billion-$1.56 billion. Adjusted profit per share in 2022 is seen between 38 cents and 41 cents.

Adjusted EPS in the fourth quarter missed estimates by a cent and came in at 8 cents, lower by 2 cents from a year ago.

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