WINSTON-SALEM, N.C. – Krispy Kreme Doughnuts Inc. (KKD) said on Friday its quarterly earnings rose 55 percent as robust doughnut sales were complemented by a new coffee-selling initiative.
The company, known for its "hot original glazed" and other premium doughnuts, reported net income for the third quarter ended Nov. 3 totaled $10.1 million, or 17 cents a diluted share, up from $6.5 million, or 11 cents a diluted share, a year earlier.
Wall Street analysts, on average, had been expecting the company to earn 16 cents per share, according to research firm Thomson First Call.
Systemwide sales, including sales from company-owned and franchise locations, rose 26.5 percent to $195.3 million. Sales in stores open for at least one year — a key measure known as comparable store sales — rose 13.0 percent at company-owned stores and 10.1 percent systemwide.
"During the quarter, we completed a systemwide rollout of a new line of signature coffee blends, which has already been met with extremely positive customer response," Scott Livengood, chairman, president and chief executive officer, said in a statement.
Looking ahead, the company said it expects fiscal fourth-quarter earnings per share to rise nearly 30 percent to 18 cents per share from the 14 cents per share earned a year earlier. That is in line with current Wall Street expectations.
It forecast same-store sales would grow by 10 percent in its fiscal fourth quarter.
The company said it opened 17 new Krispy Kreme stores, including two small retail locations, or commissaries, in the third quarter, while one commissary was closed.
It said earlier this month it would expand into the Britain, opening 25 stores in the next five years.
Krispy Kreme, which has grown rapidly in recent years and now operates 256 stores in 37 states and Canada, said it was apportioning smaller markets among its existing franchise developers. The company said in August it would start focusing on smaller markets.
Krispy Kreme shares, which were down about 16 percent on the year at Thursday's close, were up $1.39 or 3.8 percent at 38.34 in early trading on the New York Stock Exchange.