Updated from 8:15 a.m. EST

Krispy Kreme

(KKD)

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The company also said its previous guidance for fourth-quarter sales is no longer valid and said it wasn't estimating profitability or revenue for next year.

Regarding a

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.