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Pastimes : KKD - Krispy Kreme -- Ignore unavailable to you. Want to Upgrade?

To: Jon Khymn who wrote (8)	5/18/2001 3:59:54 PM
From: Jon Khymn	Respond to of 214

From the Forbes.com ------- Winner Of The Week: Krispy Kreme Davide Dukcevich, Forbes.com, 05.18.01, 2:57 PM ET NEW YORK - It was a familiar scene for Scott Livengood: hundreds of people queueing up for some warm, fresh Krispy Kreme doughnuts. But the setting wasn't some corner of commerce in Denver, San Diego or Charlottesville, Va. In a quirky promotional stunt, yesterday Krispy Kreme Doughnut (nyse: KKD - news - people) Chief Executive Livengood and his cohorts set up a makeshift doughnut-making machine and conveyor belt outside the New York Stock Exchange to inaugurate its move to the NYSE from the Nasdaq. The timing was impeccable, as usual, for the Winston-Salem, N.C.-based company. The day before, the firm reported that first-quarter net income rose 89% to $5.7 million from $3 million a year ago. Sales for the 182-store chain last quarter grew to $140.4 million from $103.3 million a year ago. The company, which earned 55 cents per share for fiscal 2001, is projected to have an EPS of 78 cents in fiscal 2002, according to Thomson Financial/First Call. Krispy Kreme At-A-Glance Krispy Kreme (nyse: KKD - news - people) 370 Knollwood Street, Suite 500 Winston-Salem, N.C. 27103 www.krispykreme.com Chairman, President and CEO: Scott Livengood 2001 Q1 Sales: $140 million 2001 Q1 Earnings: $5.7 million Recent Price: $63.75* Market Cap: $1.59 billion P/E: 96.87 * As of May 18. P/E = Price-to-earnings ratio. Investors have gobbled up Krispy Kreme shares with the same enthusiasm that the Manhattan crowd wolfed down the glazed merchandise yesterday. (The company boasts that it makes 3 million doughnuts a day.) Krispy Kreme's April 5, 2000 IPO was especially symbolic and stood in stark contrast to new economy companies. The company saw its stock rise to $36 after starting at $21, as the Nasdaq was in free-fall. E-commerce companies were out and good old-fashioned doughnuts were in. Of the 452 stocks that went public in 2000, 284, or 63%, traded below their offering prices and 68% were down from the first trading day's close by the end of the year, according to Thomson Financial Securities Data. Krispy Kreme, meanwhile, has climbed to above $64. Today the firm said it will have a two-for-one stock split. Krispy Kreme had 28.8 million shares outstanding on a diluted based as of April 29. But with an earnings-per-share ratio of 0.62, some analysts are worried that Krispy Kreme is flying too close to the sun, especially when you consider that silly dot-com excesses may now be feeding on its pastries. Morningstar analyst Corey McElveen says although Krispy Kreme has a winning strategy, its stock price does not correspond with how fast it can realistically grow. But Livengood, who said he ate seven donuts by 11 A.M. yesterday and claimed he would have had more if they hadn't taken the machine down, points out that the firm is relatively small. The 182 locations is a fraction of rival Allied Domecq unit Dunkin Donuts, which has 5,200 stores throughout the world and sells 6.4 million doughnuts a day. Wall Street is not the only place that Krispy Kreme has a cult following. In Denver, a Krispy Kreme store opening in December brought in $369,000 in sales in the first week. Krispy Kreme restaurants make a visual and visceral connection because they make doughnuts in front of the customers. That process is fun to watch and somehow makes eating Krispy Kremes more satisfying. Equally important is that the pastries are made continuously in the morning. Livengood says that the brand has been built on 64 years of making a good product. Krispy Kreme has artifacts in the Smithsonian. Despite the company's age, Livengood will tell you with his North Carolina twang, "We're just in the early stages of growth." forbes.com