Reuters -- Krispy Kreme Reports Hot Earnings
Aug 23, 2001
9:00am ET
By David Bailey
CHICAGO (Reuters) - Krispy Kreme Doughnuts Inc. said on Thursday that fiscal
second-quarter earnings jumped 65 percent as the maker of hot glazed doughnuts
continued rapid expansion.
Krispy Kreme, which operates 192 stores in 31 states, raised long-term forecasts,
saying it sees fiscal 2002 and 2003 full-year earnings beating current Wall Street
consensus estimates. The company said it plans to open 40 stores in the current
fiscal 2002, up from a previous plan of 38 stores.
Shares of Winston-Salem, North Carolina-based Krispy Kreme rose to $37.00 in U.S.
pre-open trade on the Instinet trading system from $34.98 at Wednesday's close on
the New York Stock Exchange. The shares have climbed about 18 percent since
Krispy Kreme joined the NYSE in May.
"I believe the strength of our brand, unique business model and a proven strategy
positions us to achieve continued strong results over the long term," Chief Executive
Scott Livengood said in a statement.
The company also said it expects earnings growth of 30 percent to 35 percent a year
over the next three years, compared with previous guidance of 25 percent growth
annually.
Krispy Kreme reported net income of $5.9 million, or 10 cents a diluted share, for the
second quarter ended July 29, compared with $3.6 million, or 6 cents, a year ago.
Analysts' second-quarter estimates ranged from 8 to 10 cents per share with a
consensus at 9 cents, according to market research firm Thomson Financial/First Call.
"They beat the (earnings) number pretty well and the same-store sales were very
strong," said Andrew Wolf, an analyst at BB&T Capital Markets. "The stock market
thinks this company's earnings growth rate is going to continue. There aren't a lot of
Krispy Kremes in the country.... You can at least double them."
Krispy Kreme said it now expects to earn 42 cents per share for fiscal 2002 and 59
cents per share for fiscal 2003.
Analysts' fiscal 2002 estimates range from 38 to 43 cents per share with a consensus
at 40 cents, according to First Call. For fiscal 2003, analysts currently expect Krispy
Kreme to earn 50 to 55 cents per share, with a consensus of 51 cents.
Systemwide sales, including sales of company and franchise stores, rose 34 percent
in the quarter to $144.3 million from $107.7 million in the year ago quarter and total
company revenue rose 27.8 percent to $89.5 million.
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