NEW YORK (TheStreet) -- Following its third-quarter earnings release late Monday, Krispy Kreme (KKD) suffered a 14% haircut in after-hours trading. That was in addition to a 3% pullback during regular trading. It all added up to a rough day for the doughnut maker, as investors digested the earnings release and weren't satisfied.
The numbers were actually not bad -- revenue rose 7% to $114.2 million, in line with the consensus estimate. Earnings of 16 cents per share were a penny ahead of the consensus. But after a 167% run by shares over the past year, investors were looking for more and didn't get it. They were probably dismayed by the company's earnings estimate for 2015 of 71 cents to 76 cents a share, below analysts' previous estimate of 77 cents.
Yesterday's action was deja vu all over again as shares suffered a similar fate following the company's second-quarter earnings report in August. An earnings miss of 2 cents sent shares down 15% on Aug. 30, but the stock recovered all of that lost ground over the subsequent five weeks, and then rallied further to a nine-year high.
During the past year, there has rarely been a dull moment following a Krispy Kreme earnings release. Following the first-quarter release in May, which contained better-than-expected results, shares jumped more than 21%. And following last year's third-quarter release, shares rose 23%.
And so it goes with a company that had been all but forgotten just a few years ago -- and appears to be making the most of its second chance at life after nearly imploding. This rebirth, of course, comes with a price, especially once investors have re-embraced the story, which has sent shares up more than 300% in the past 16 months and 2,000% in the past five years. It is difficult to continually exceed ever-growing expectations, and the price for not doing so is very high.
KKD data by YCharts
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV