Krispy Kreme EBITDA Surges 43% as Turnover Strategy Takes Hold
The doughnut maker reported a 43.2% jump in adjusted EBITDA to $28.8 million for the second quarter, even as net revenue fell 12.8% to $331.0 million.
Krispy Kreme, Inc. reported a significant improvement in profitability for its second quarter, with adjusted EBITDA rising 43.2% to $28.8 million. The earnings beat comes as the company continues to execute a strategic shift towards refranchising and the closure of underperforming company-operated stores. Despite the profit increase, net revenue declined by 12.8% to $331.0 million, reflecting the impact of these structural changes on top-line figures.
System-wide sales showed modest growth, rising 1.1% in constant currency terms to $497.3 million. When excluding sales from the recently concluded partnership with McDonald’s in the US, system-wide sales rose by 2.6%. This performance underscores the resilience of the brand’s core business model as it transitions away from the multi-year agreement that previously contributed to its sales volume.
CEO Josh Charlesworth highlighted strong consumer demand for doughnuts in both domestic and international markets as key drivers of the turnaround. In a statement regarding the results, Charlesworth noted that the second quarter highlighted continued significant progress on the company’s strategy to strengthen the balance sheet, reduce leverage, and drive sustainable, profitable growth.
The company has reaffirmed its full-year 2026 financial outlook, forecasting net revenue between $1.25 billion and $1.35 billion. For adjusted EBITDA, the company expects to deliver between $140 million and $150 million for the fiscal year. This guidance suggests that management remains confident in the long-term viability of its refranchising model despite the near-term revenue headwinds.
The turnaround strategy appears to be gaining traction as Krispy Kreme navigates a complex retail environment. By focusing on higher-margin franchised locations and shedding underperforming assets, the company is aiming to improve its operational efficiency. Investors will be watching to see if the cost savings from store closures and the shift in ownership structure continue to outweigh the loss of revenue from the McDonald’s partnership in subsequent quarters.
