This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Restaurant Stocks: Earnings to Watch

Krispy Kreme

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Krispy Kreme (KKD) reported fiscal third quarter earnings on Dec. 1.

Revenue: $90.2 million, compared with year-earlier sales of $83.6 million.

Net Income: $2.4 million, compared with a year-earlier loss of $2.4 million.

Net Earnings Per Share: 3 cents, compared with year-earlier loss of 4 cents per share.

Analysis: Analysts from CL King initiated coverage of Krispy Kreme in July with a strong buy rating and $5 price target.

The donut shop operator posted far better-than-expected quarterly results and raised its 2011 outlook. Analysts' consensus call had been for earnings of $100,000, or zero cents per share, on revenue of $87.8 million.

"Higher sales by company and franchise shops drove profit improvements in the KK Supply Chain segment, and our International Franchise business continued to exceed our expectations," said CEO Jim Morgan.

Krispy Kreme said comps rose 5% in the recent quarter, the eighth consecutive quarterly increase. It added a net increase of 16 stores in the quarter. As of Oct. 31 there were 85 company-owned Krispy Kreme stores and 564 franchised locations.

Krispy Kreme upped its outlook for fiscal 2011. It now expects operating income (EBIT), exclusive of impairment and lease termination costs, to be in a range of $17 million to $20 million. That's up from its prior outlook for full-year EBIT in a range of $13 million to $17 million. Analysts expect the restaurant operator to book EBIT of $16 million in fiscal 2011.

In 2012 Krispy Kreme expects to open 5 to 10 company stores, 5 to 15 domestic franchise stores, and more than 30 international franchise stores.

"We expect continued organic same store sales growth in our domestic stores, but believe international franchise same store sales will continue to be pressured by the substantial growth in international markets in recent years," Morgan said.

The CEO conceded that uncertainty surrounding commodity costs are likely to grow, posing some uncertainty when forecasting future operating results. "Accordingly, we are working to reduce the consumption of certain key ingredients, and are evaluating the timing and scope of price increases needed to offset higher input costs."

Krispy Kreme forecast 2012 EBIT to be in a range of $22 million to $24 million, an increase of 29% to 41% from the low end of its revised fiscal year 2011 guidance, and an increase of 10% to 20% from the top end of the fiscal 2011 range.

"It is important to note that this outlook is very preliminary, and we expect to establish more formal guidance in conjunction with the release of our fourth quarter results in April," Morgan added.

5 of 22

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs