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Sticking With Krispy Kreme

NEW YORK ( TheStreet) -- Shares of donut-maker Krispy Kreme (KKD - Get Report) have staged a solid comeback since a less-than-stellar second-quarter earnings report in late August gave the shares a one-day 15% haircut. That drubbing came after an earnings miss of 2 cents per share disappointed a growing body of Krispy Kreme investors, but the stock has gained back all that ground and more, and currently trades at a nine-year high.

The reasons for the growing excitement, and willingness to get past that less than stellar quarter, have to do with a few recent announcements that bolster the notion that Krispy Kreme is in growth mode. Two weeks ago, the company trumpeted its entry into the South American markets, with a deal to open 25 stores in Colombia over the next five years. Last week came the announcement of its first outpost into Singapore, with a 15-store franchise deal by 2017.

Clearly, this is not the 2000-era Krispy Kreme, which ultimately came close to crashing and burning. Today's Krispy Kreme is focused on international growth, especially in emerging markets. Some investors are surprised to find out that of the company's 790 total stores, 546 or nearly 70% are outside the U.S. Furthermore, management remains confident that it can grow its international store base to 900 by 2017.

Not that the company is struggling domestically. Last quarter represented the 19th-consecutive quarter of same-store-sales growth for company-owned stores. Krispy Kreme also is continuing attempts to make inroads into the coffee business, announcing a deal to sell its ground coffee in some of Walmart's (WMT) Sam's Club stores in the Southeast. We'll see how that goes. But the driving force for what has historically been perceived as a U.S. icon is growth from international franchising.
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