Krispy Kreme Heats Up, Rising Nearly 24% on Solid Earnings

Updated from 12:53 p.m. EDT

Shares in Krispy Kreme Donuts (KREM Quote) surged Thursday after the company reported quarterly earnings above Wall Street estimates.

The company, which is known for making hot glazed donuts, reported net income for the second quarter at $3.6 million, a 266% increase from the $1 million in net income in last year's second quarter. It earned 25 cents a share, up from 10 cents a share in the year-ago period. The consensus among Wall Street analyst was for the company to earn 18 cents a share, according to market research firm First Call/Thomson Financial.

Shares rose nearly 24% on the news, finishing up 14 15/16 at 78 5/16. Its all-time high is 80 5/8.

Revenue for the quarter rose 36% to $70 million, compared with $51.4 million in last year's second quarter.

Among stores that have been open at least a year, systemwide stores -- which includes franchises -- rose 19.4%, while company-owned store sales rose 24.4%.

The company also raised its earnings-per-share expectations for the full year to $1. This compares to an 85-cent consensus among Wall Street analysts, according to First Call/Thomson Financial.

Krispy Kreme, based in Winston-Salem, N.C., went public in April. During the quarter that ended July 30, six new stores opened, while the company increased its projected store openings for the current year to 28 from 22. It expects to open 32 new stores in fiscal 2002. It has 154 stores in 27 states.

Krispy Kreme was founded in 1937, and has long been popular in the South. In recent years, it began expanding into the Northeast and West.