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Krispy Kreme, Inc. (DNUT) Q4 2024 Earnings Summary

Executive Summary

  • Net revenue was $404.0M, down 10.4% YoY due to Insomnia Cookies divestiture ($101M impact) and a cybersecurity incident ($11M revenue hit); organic revenue grew 1.8% with the first quarter exceeding $100M in global DFD sales .
  • Adjusted EBITDA was $45.9M (11.4% margin), with an estimated $10M adverse impact from the cyber incident; adjusted EPS was $0.01 (vs $0.09 YoY) and GAAP diluted EPS was $(0.13) .
  • 2025 guidance introduced: net revenue $1.55–$1.65B, organic growth +5–7%, adj. EBITDA $180–$200M, adj. EPS $0.04–$0.08; Q1 2025 outlook: revenue $370–$390M, adj. EBITDA $25–$30M with margin compression in H1 before H2 operating leverage .
  • Strategic catalysts: accelerating U.S. DFD expansion (launch to ~500 McDonald’s restaurants in NYC, targeting ~6,000 by YE 2025), outsourcing U.S. logistics, and evaluating refranchising company-owned international markets to drive capital-efficient growth .

What Went Well and What Went Wrong

What Went Well

  • Delivered Fresh Daily crossed $100M in quarterly revenue globally; organic revenue grew 1.8% despite cyber headwinds (−280 bps), demonstrating resilience of the omni-channel model .
  • Points of Access grew 24.1% YoY to 17,557, driven by U.S. expansion (now >1,900 McDonald’s restaurants receiving daily deliveries) and international growth .
  • CEO emphasized focus on affordable Original Glazed, logistics outsourcing, and refranchising international markets to drive capital-efficient, profitable growth: “I believe these changes will drive capital efficient growth…” .

What Went Wrong

  • U.S. segment net revenue declined 17.2% (−$50.9M) due to Insomnia divestiture (−$57.4M), retail softness, and cyber disruptions; U.S. adj. EBITDA fell 44% with ~350 bps margin hit from cyber incident .
  • Adjusted EBITDA fell 28.4% YoY to $45.9M; adjusted EPS fell to $0.01 (−$0.08 YoY), with cyber impacts estimated at $0.04, and higher interest and D&A .
  • Management guided below Street on top line (organic +5–7% but reported $1.55–$1.65B vs Street higher), citing consumer pressures, weather, Insomnia divestiture (~$70M/quarter drag) and FX (≈$40M annual headwind) .

Financial Results

Consolidated Performance (Sequential trend and YoY context)

MetricQ2 2024Q3 2024Q4 2024
Net Revenue ($USD Millions)$438.8 $379.9 $404.0
GAAP Diluted EPS ($)$(0.03) $0.23 $(0.13)
Adjusted EBITDA ($USD Millions)$54.7 $34.7 $45.9
Adjusted EBITDA Margin (%)12.5% 9.1% 11.4%
Adjusted Diluted EPS ($)$0.05 $(0.01) $0.01
YoY ComparisonQ4 2023Q4 2024
Net Revenue ($USD Millions)$450.9 $404.0
GAAP Diluted EPS ($)$0.02 $(0.13)
Adjusted EBITDA ($USD Millions)$64.1 $45.9
Adjusted EBITDA Margin (%)14.2% 11.4%
Adjusted Diluted EPS ($)$0.09 $0.01
Versus Estimates (S&P Global)Q4 2024 Consensus
Revenue ($USD Millions)N/A – S&P Global data unavailable (API limit)
Primary EPS ($)N/A – S&P Global data unavailable (API limit)

Note: Wall Street consensus from S&P Global was unavailable at time of request due to provider rate limit; management commentary indicated the FY2025 top-line guide was below Street .

Segment Breakdown (Q4 2024 vs Q4 2023)

SegmentNet Revenue Q4 2023 ($MM)Net Revenue Q4 2024 ($MM)Adj. EBITDA Q4 2023 ($MM)Adj. EBITDA Q4 2024 ($MM)
U.S.$296.0 $245.1 $42.1 $23.6
International$131.0 $138.4 $27.9 $25.7
Market Development$23.9 $20.5 $11.1 $11.9
Total$450.9 $404.0 $64.1 $45.9

KPIs and Operating Metrics

KPIQ2 2024Q3 2024Q4 2024
Global Points of Access15,853 15,811 17,557
U.S. DFD Doors7,497 7,711 9,644
Sales per Hub – U.S. (TTM, $ Millions)5.0 4.9 4.9
Sales per Hub – International (TTM, $ Millions)10.1 10.1 10.1
Digital Sales % of Retail/Doughnut Shop Sales22.2% (Retail) 15.5% (Doughnut Shop) 14.4% (Retail)
U.S. DFD Average Sales per Door per Week (APD, $)657 —631

Guidance Changes

FY2024 Guidance Progression (historical for context)

MetricQ2 2024 Guidance (Aug)Q3 2024 Guidance (Nov)Change
Net Revenue ($B)$1.650–$1.685 $1.650–$1.685 Maintained
Organic Revenue Growth (%)+5%–+7% +5%–+7% Maintained
Adjusted EBITDA ($MM)$215–$220 $205–$210 Lowered
Adjusted Diluted EPS ($)$0.24–$0.28 $0.18–$0.22 Lowered
Income Tax Rate (%)28%–30% 28%–30% Maintained
Capex (% of Revenue)7%–8% 7%–8% Maintained
Interest Expense ($MM)$55–$60 $55–$60 Maintained

FY2025 Guidance (introduced Q4 2024)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue ($B)FY2025—$1.550–$1.650 New
Organic Revenue Growth (%)FY2025—+5%–+7% New
Adjusted EBITDA ($MM)FY2025—$180–$200 New
Adjusted EPS ($)FY2025—$0.04–$0.08 New
Income Tax Rate (%)FY2025—32%–36% New
Capex (% of Revenue)FY2025—6%–7% New
Interest Expense ($MM)FY2025—$65–$75 New
Leverage (Net)FY2025 YE—Trend to ~4.0x New
DividendFY2025—$0.035/share quarterly declared (pay 5/7/25) New

Q1 2025 Outlook (from Q4 call)

MetricPeriodGuidance
Net Revenue ($MM)Q1 2025$370–$390
Adjusted EBITDA ($MM)Q1 2025$25–$30

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
U.S. DFD Expansion & McDonald’s rolloutQ2: Nationwide rollout starting fall; DFD sales +24%; APD $657 . Q3: McDonald’s rollout began in Chicago; expect ~2,000 restaurants by YE 2024 .Q4: Launch to ~500 NYC-area McDonald’s; aiming ~6,000 by YE 2025; demand dips after local marketing; working to sustain awareness .Expanding, near-term demand normalization .
Logistics OutsourcingQ3: RFP launched Oct 9 with carriers .Q4: Expect to award contracts; target >50% of U.S. DFD deliveries outsourced by YE 2025; EBIT-neutral goal with some start-up costs .Implementation phase; neutral P&L longer-term .
International refranchisingQ3: Capital-light model gains .Q4: Evaluating refranchising company-owned markets (UK/IE, ANZ, JP, MX, CA) to accelerate capital-efficient growth .Active evaluation; partner selection focus .
Consumer/macro & channel mixQ2: Digital/DFD strength; innovative collections . Q3: Consumer softness in U.S. retail, UK pressure; accidents costs .Q4: Value-conscious consumer under pressure; spotlight Original Glazed value; biggest U.S. retail sales day ever on Valentine’s .Mixed; focus on value to drive demand .
Cybersecurity incident impact—Q3: N/A.Q4: $11M revenue/$10M adj. EBITDA impact in Q4; lingering Q1 labor/material efficiency impacts; operations now fully restored .
UK performanceQ2: Softer transactions; margin pressure .Q3: New UK management; margin down .Q4: Focus on OG mix, right-sizing production, price pilots; margin pressure continued .
Free cash flow & CapexQ2: Positive FCF; capex ~7–8% . Q3: Capex 6.9% of revenue; negative FCF YTD .Q4: FY capex 7.25%; positive operating cash flow; target improved EBITDA-to-FCF conversion in 2025; build 5–7 hubs vs earlier plans .Improving discipline .
FX headwinds——FY2025: ~$3–$5M EBITDA headwind; ~$40M revenue headwind noted by CFO .

Management Commentary

  • CEO: “We delivered an 18th consecutive quarter of year-over-year organic sales growth. Excluding the estimated cybersecurity incident impact, results were largely in line with our expectations.” .
  • CEO: “We expect to soon award contracts to outsource U.S. logistics… and we have begun a process to evaluate refranchising certain international markets.” .
  • CFO: “We estimate the incident impacted revenue for the quarter by $11 million, with an estimated adjusted EBITDA impact of $10 million… Insurance is expected to offset a portion of these costs and losses.” .
  • CEO on Original Glazed: “It’s our most differentiated product… most affordable… highest margin… the best way for us to sustainably profitably grow.” .

Q&A Highlights

  • OpEx/SG&A trajectory: Expect front-half pressure from restructuring and investments (operations leadership, logistics outsourcing) with back-half leverage; SG&A flat as % of revenue in FY2025 .
  • Door optimization: As national partners expand (Walmart, Target, Kroger, Costco), management will rationalize lower-performing DFD doors to improve economics .
  • Street vs guide: Management acknowledged FY2025 top-line guide below Street; drivers include consumer softness, weather, Insomnia divestiture ($70M/quarter), FX ($40M revenue impact) .
  • McDonald’s rollout: ~2,500 restaurants already; ~6,000 by YE2025; initial demand high with local marketing, then dips; working with partner to sustain awareness pre-national marketing .
  • Q1 2025 pressure: Sequential improvement expected through year after most pressure in Q1 from cyber, start-up costs, macro/weather .

Estimates Context

  • S&P Global consensus for Q4 2024 revenue and EPS was unavailable at time of request due to provider rate limits; therefore, formal beat/miss vs consensus cannot be determined. Management indicated FY2025 top-line guide was below Street expectations, implying potential estimate revisions lower for reported growth but stable organic growth trajectory .
  • We can revisit comparisons when S&P Global access is restored; near-term, analysts may adjust EBITDA and margin assumptions to reflect H1 compression, cyber tail effects in Q1, FX headwinds, and Insomnia divestiture impacts .

Key Takeaways for Investors

  • Near-term margins: Expect H1 margin compression from lingering cyber impacts and start-up costs; H2 operating leverage from hub-and-spoke efficiencies and DFD scale-up .
  • Growth mix pivot: Emphasis on affordable Original Glazed to drive value conversion while expanding DFD through national partners, including McDonald’s and Costco .
  • Capital efficiency: Outsourced logistics (>50% of U.S. DFD by YE2025) and refranchising of company-owned international markets should reduce capital intensity and improve returns .
  • U.S. segment watch: APD declined to $631 on mix; expect door optimization and partner expansion to stabilize unit economics; monitor retail softness .
  • FX and interest: FY2025 EBITDA guide includes ~$3–$5M FX headwind; interest expense $65–$75M with ~$500M debt hedged—keep in mind for EPS modeling .
  • Dividend reinstatement: Quarterly $0.035/share declared; signals confidence in cash generation trajectory despite investment phase .
  • Stock catalysts: Progress on McDonald’s rollout, signing logistics contracts, refranchising announcements, and Q1 cyber overhang resolution are key narrative drivers through mid-2025 .

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