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Krispy Kreme shares dip over stale third-quarter earnings

December 9, 2014, 11:02 PM UTC
Krispy Kreme doughnuts go into production at the opening of the store at Harrods in London, October,..
Krispy Kreme doughnuts go into production at the opening of the store at Harrods in London, October, 3, 2003. [The U.S. chain opened its first European outlet in London on Friday.] - RTXM8A5
Photograph by David Bebber — Reuters

Shares of Krispy Kreme Doughnuts dipped in after-hours trading on Tuesday after the Southern doughnut-maker released third-quarter earnings that were not to the taste of investors.

The Winston-Salem, N.C.-based company posted a 3.7% bump in same-store sales in the third quarter, which helped overall revenue jump 7.6%, to $122.9 million, year-over-year. But, Krispy Kreme’s quarterly profits of $8.1 million, or 12 cents per share, fell below Wall Street’s expectations despite rising from $6.8 million during the same period last year.

Despite the sales gains, Krispy Kreme’s (KKD) stock fell more than 5% after the markets closed as a result of the disappointing earnings. Still, the company’s shares have gained nearly 23% since June, when new CEO Tony Thompson took the reins.

Thompson has emphasized a need for Krispy Kreme to bolster its overall numbers through an increased focus on beverage sales — an area where competitors such as Dunkin’ Donuts (DNKN) earn a large share of their business. In the company’s latest earnings release on Tuesday, Thompson coffee and other speciality beverages should contribute a larger share of the company’s revenue in the future as Krispy Kreme focuses more on its in-store coffee and espresso options while also promoting packaged ground coffee and K-Cup products.

“[A]s our store footprint grows, we will become more accessible as a retail beverage destination, which should promote more visits to Krispy Kreme not only by frequent beverage consumers but also by our core Krispy Kreme doughnut fans,” Thompson said in a statement.