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Krispy Kreme Significantly Narrows Its 4Q Loss

The Associated Press

WINSTON-SALEM, N.C. (AP) — Krispy Kreme Doughnuts Inc. said Thursday it substantially narrowed its fiscal fourth-quarter loss, free of most of the impairment and lease termination costs that burdened its prior-year results.

The doughnut retailer also touted its first annual operating profit since fiscal 2004.

The news sent the company's stock up 50 cents, or 22.1 percent, to $2.78 in afternoon trading. Over the past year, the shares have traded in a range of $1.01 to $5.65.

Krispy Kreme lost $303,000, or less than a penny per share, during the quarter compared with a loss of $31.8 million, or 50 cents per share, a year earlier.

The previous year's results were weighed down by $27.6 million in impairment charges and lease termination costs. That amount was substantially reduced to $1.2 million for the period ended Feb. 1.

Operating profit was $1.5 million for the fourth quarter compared with an operating loss of $25.2 million a year ago.

Sales fell 17 percent to $91.8 million from $110.9 million, but same-store sales — a key gauge of a retailer's performance — edged up 0.9 percent.

Same-store sales, or sales at stores open at least a year, measure growth at existing stores rather than newly opened ones.

Krispy Kreme said its lenders have also agreed to amend its credit agreements, which will likely allow it to stay in compliance with the facilities. The retailer has shaved $32 million off its debt load in the past two years. It had $39 million in debt at the end of fiscal 2009.

For the year, Krispy Kreme's loss shrunk to $4.1 million, or 6 cents per share, from a loss of $67.1 million, or $1.05 per share.

Full-year operating profit was $4.8 million compared with an operating loss of $42.6 million in the previous year.

Annual sales declined 11 percent to $384 million from $429.3 million.

Krispy Kreme has approximately 520 stores globally.