Milling & Baking News Corporate Profiles - October 2011 - (Page 102)

Company Overview Krispy Kreme Doughnuts Inc. Chain bounces back financially, launches coffee line ecent financial numbers offer proof Krispy Kreme Donuts Inc., Winston-Salem, N.C., has recovered and looks to be a donut destination spot for years to come. To achieve future growth, the company has expanded in coffee and will continue with limitedtime offerings of seasonal donuts. For the six months ended July 31, Krispy Kreme had net income of $18 million, or 25c per share, which was up from $6.7 million, or 10c per share, in the same time period of the previous year. The company expects fiscal 2012 consolidated operating income of between $22 million and $24 million. “We have now delivered our best firsthalf performance in seven years and expect to generate operating income growth of 20% compared to fiscal 2011,” said Jim Morgan, chairman, president and chief executive officer, in an Aug. 25 earnings conference call. The outlook for the donut chain has changed over the past four years. Krispy Kreme suffered a net loss of $42.2 million for the fiscal year ended Jan. 28, 2007, which was followed by a net loss of $67.1 million in the year ended Feb. 3, 2008, and a net loss of $4.1 million for the year R ended Feb. 1, 2009. Company shares on the New York Stock Exchange fell below $1.30 per share in February of 2009. Mr. Morgan has led the charge back to profitability. Then chairman, Mr. Morgan in January of 2008 was elected to the additional positions of president and chief executive officer. Krispy Kreme’s share price on Aug. 25 closed at $7.84 per share. The company had a net increase of 17 stores in the second quarter to push the total to 669 stores, which compared with 395 at the end of the fiscal year ended Jan. 28, 2007. Mr. Morgan talked about room for future growth in the Aug. 25 call. He pointed out consumer frequency rate stood at one visit per month, below competitors in both the quick-service restaurant segment and the coffee house segment. “While Krispy Kreme has always been more of a snack destination than a meal destination, we think we can improve the frequency of transactions by expanding the food options we offer our guests without diluting our place as the world’s premier donut destination,” Mr. Morgan said. The company will complement its traditional donut line of more than 20 varieties Jim Morgan with limited-time offerings, he said. For example, Krispy Kreme in July and August featured a lemon cake donut, a lemon cream pie donut and three flavors of Jolly Rancher Krispy Kreme chillers. Coffee in 2011 made up about 4% of on-premise Krispy Kreme sales, he said. “We believe high margin beverage products can and should be a much larger percentage of our sales mix over time and that coffee alone should ultimately represent a double-digit percentage of our onpremise sales,” Mr. Morgan said. The company on Sept. 1 launched Krispy Kreme Signature Coffee Blends in the varieties of house, dark roast and decaffeinated. CP F ast acts Krispy Kreme expects ﬁscal 2012 consolidated operating income of between $22 million and $24 million. The company had a net increase of 17 stores in the second quarter to push the total to 669 stores. The company on Sept. 1 launched Krispy Kreme Signature Coffee Blends. 102 \ October 2011 Milling & Baking News • Food Business News • Baking & Snack • Meat & Poultry Corporate Proﬁles

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - October 2011

Milling & Baking News Corporate Profiles - October 2011