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.