Updated from 8:15 a.m. EST
swung to a third-quarter loss and reported a troubling decline in average store revenue, as a catastrophic year continued.
The doughnut seller, whose shares are down 69% since Jan. 1, lost $3 million, or 5 cents a share, in the three months ended Oct. 31, compared with earnings of $14.5 million, or 23 cents a share, last year. Backing out discontinued operations and other items, the company earned $2.4 million, or 4 cents a share. Analysts had been expecting earnings of 13 cents a share.
Overall revenue rose 1.4% from a year ago to $170.1 million, while company sales rose 9.6% to $121.2 million. The latter was boosted by the inclusion of revenue from a partnership in New England that was consolidated under the Fin-46 accounting standard.
The stock lost $1.87, or 16.2%, to $9.63.
Krispy Kreme said systemwide average sales per week fell 16.7% from a year ago to roughly $52,200 per store, while the same metric was down 19.9% to $58,400 at company stores. Same-store sales fell 6.4% from a year ago at systemwide stores and 6.2% at company stores.
The company also said its previous guidance for fourth-quarter sales is no longer valid and said it wasn't estimating profitability or revenue for next year.
Securities and Exchange Commission
probe announced in the third quarter, Krispy Kreme said it spent $3 million on legal fees and formed a special committee of its board to handle the inquiry.
The company was also forced to pay $3.6 million to buy shares from managers of a Midwest joint venture who owned a put option on stock equal to 11% of the company.
"Clearly we are disappointed with our third-quarter results. We are focused on addressing the challenges facing the company and regaining our business momentum," the company said in a release.