Krispy Kreme Doughnuts, Inc. (KKD) Message Board

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Non-Tech : Krispy Kreme Doughnuts, Inc. (KKD)

KKD 21.00

0.0%

Aug 4 5:00 PM EST

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To: jhg_in_kc who wrote (830)	8/30/2001 10:29:44 AM
From: GVTucker	Read Replies (1) of 1001

For the most recent quarter, KKD had net income of $5.92mm. Rather than annualize that number, I'd just as soon use management's guidance, given that it has been conservative enough in the past. (Management stated on the conference call recently that they are striving not to understate their guidance now, they're trying to be as realistic as possible while still providing a target that can be surpassed.) For FY03 (Jan 03) guidance is for net income of $34.5mm, or 59¢/share. Management is also stating over a 3 year time horizon, 30-35% net income growth is possible. Let's give 'em 35% growth over that fiscal '03 number. By the end of calendar 2005, that would translate into $1.45/share earnings, or $84.8mm. Rather than the 15x target PE in '05, though, I can forsee giving KKD a 25 PE, given that the brand name has some good value now and probably will in another 4 years. That translates to a price at the end of 2005 of 36¼, for an annualized return of 4.6%. Given the way that the market is trading, that could be some significant outperformance of the S&P 500.

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