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Krispy Kreme Losses Narrow

WINSTON-SALEM, NC-The troubled donut company shows a $6 million loss in its delayed first-quarter 2006 report.

By Marita Thomas | Updated on December 26, 2006

WINSTON-SALEM, NC-Although Krispy Kreme Doughnuts Inc. continues to register losses, a long-delayed SEC filing of its quarterly financials for the period ended April 30, 2006 suggest it may be stemming the tide. The net loss of $6 million, or 10 cents a share, in the report filed Dec. 22, compares with a loss of $53.4 million, or 86 cents a share, for the same quarter of the previous year.

Revenue for the locally based company dropped 22% to approximately $119.8 million for the quarter, down from $152.5 million for the prior-year quarter. As a result of store closings, operating expenses were down 23% to $97.1 million. According to the report, Krispy Kreme has closed 62 “factory” stores, which are ones that make donuts on the premises, since the end of fiscal 2005.

Store closings resulted in a 7.3%-drop in unit operating weeks for the quarter ended April 30, says the company. Sales dropped 16.6% from the same quarter a year ago, and average weekly sales per store were down 10.3%, according to the report. The company-wide decline in sales reflects a 24.2% drop at company-owned stores and a 10.3% slide at franchised units. Revenue in company-owned units was down $86 million for the quarter.

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