Krispy Kreme (DNUT) Reports Q4 Earnings Amid Cyber Incident and Expansion Push
- Hardik Shah
- Feb 26
- 3 min read
Updated: Feb 27
TL;DR
Financial Performance: Q4 revenue of $404M (-10.4% YoY) impacted by a cybersecurity incident; full-year revenue at $1.67B (-1.2% YoY); adjusted EBITDA fell 28.4% to $45.9M.
Market & Operational Trends: Growth driven by Delivered Fresh Daily (DFD) expansion, with McDonald's partnership scaling up; cybersecurity disruptions weighed on sales.
Future Growth Drivers: Focus on national distribution partnerships, outsourcing U.S. logistics, and refranchising select international markets.
Financial Results
Krispy Kreme (NASDAQ: DNUT) posted mixed financial results for Q4 2024, with net revenue at $404 million, a 10.4% decline year-over-year due to the sale of Insomnia Cookies and a cybersecurity incident. Organic revenue grew 1.8% but was hindered by an estimated $11 million revenue loss from the cyberattack.
The company reported a GAAP net loss of $22.2 million, compared to a $1.9 million profit in Q4 2023. Adjusted EBITDA declined 28.4% to $45.9 million. For the full year, net revenue was $1.67 billion (-1.2% YoY), with organic revenue up 5.0%. Adjusted EBITDA for 2024 was $193.5 million, an 8.6% decline YoY.
"We delivered an 18th consecutive quarter of organic sales growth. Excluding the estimated cybersecurity impact, results were largely in line with our expectations," said CEO Josh Charlesworth.
Looking ahead, Krispy Kreme projects 2025 revenue between $1.55B and $1.65B, with adjusted EBITDA ranging from $180M to $200M and EPS of $0.04 to $0.08.
Operational Performance
Industry & Market Trends
Despite macroeconomic pressures, Krispy Kreme's focus on its Delivered Fresh Daily (DFD) model helped expand global points of access by 24% to 17,557 locations. The McDonald's partnership is a key driver, with Krispy Kreme now delivering to 2,500 McDonald's stores, aiming for 6,000 by year-end.
Key Business Milestones
Expanded to 40 countries, with notable growth in France, South Korea, Canada, and Australia.
Increased U.S. DFD locations by over 2,800, including partnerships with Kroger, Target, and Publix.
Launched viral marketing campaigns, including the "Grinch" Christmas campaign and Valentine's Day promotions, which led to the biggest U.S. retail sales day ever.
Challenges & Risks
Cybersecurity Incident: Online ordering and supply chain disruptions led to an estimated $10 million EBITDA impact in Q4.
Margin Pressures: Increased labor and material costs impacted Q4 margins, with expected improvements in the second half of 2025.
Consumer Trends: Demand softening due to inflation and shifts in spending habits, prompting pricing and promotional adjustments.
Strategic Initiatives
Krispy Kreme continues optimizing operations for long-term efficiency and profitability:
Logistics Outsourcing: Plans to outsource over 50% of DFD deliveries by year-end.
Refranchising International Markets: Evaluating potential partners for markets like the U.K., Canada, and Australia to focus resources on U.S. expansion.
New Market Entry: Expanding to Brazil and Spain in 2025 through franchise partnerships.
Capital Allocation
Debt & Liquidity Management: Reduced supply chain financing liabilities by $44M in 2024.
CapEx Plans: Targeting capital expenditures at 6-7% of net revenue, focusing on new hub development in key U.S. markets.
The Bottom Line
Krispy Kreme’s Q4 2024 results reflect resilience amid challenges. The company continues to drive organic growth through its expanding DFD network, strengthened partnerships, and strategic market exits. While short-term pressures from cybersecurity disruptions and inflation persist, its focus on logistics outsourcing, international refranchising, and capital-light expansion positions it for sustainable profitability in 2025 and beyond.
--
Comments