This Day On The Street
Continue to site right-arrow
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!

Donuts Rise From the Ashes

Stocks in this article: KKD SBUX

NEW YORK ( TheStreet) -- Yesterday was a big day for Krispy Kreme (KKD), and not just because the stock ended the day up 5.5%, or because the company announced that it has entered an agreement for 10 franchises in Taiwan.

Yesterday, the stock hit an eight-and-a-half-year high, and is now in territory it has not seen since the summer of 2004. Those were heady times for this former cult stock; the wheels were beginning to come off as the company's overly aggressive expansion plans, poor management, and accounting issues converged to nearly take the company under.

This was a $40 stock in March of 2004; by August of that year, it was at $14.

KKD Chart KKD data by YCharts

It only got worse from there. The profits dried up, and between 2004 and 2009, the company closed 240 stores By early 2009, shares changed hands for just over a buck, and this once can't-miss brand appeared to be on its last legs; its rich history all but a memory. While it did not go public until 2000, the company had been founded in 1937, and had a regional cult-like following. Going public presented an opportunity to take Krispy Kreme national.

After what seemed like a great start, the company lost money for 5 consecutive years through 2009, and had to restate several years of financials. By then, investors had all but given up on the name; this was not the second coming of Starbucks (SBUX), as some might have believed. But very quietly, Krispy Kreme began to right the ship. In 2010, the company reported break-even results, and same store sales showed some signs of life.

The company was profitable in 2011 and 2012, and has been delivering better than expected results. Last quarter, same store sales rose 6.8%, and earnings per share of 12 cents a share easily beat the eight cents a share consensus estimate. The company also added 20 new stores. Interestingly though, much of the company's new found expansion is not coming from the U.S., but from international franchising.

In early December, the company opened its 500th international store, which also happened to represent its 90th location in Mexico. For perspective, consider that at the end of the third quarter, there were just 238 U.S. locations.

1 of 2

Select the service that is right for you!

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!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • 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