Donuts are on sale at the Krispy Kreme store on May 5, 2021 in Chicago, Illinois.
Scott Olson | Getty Images
Krispy Kreme’s third-quarter revenue grew 18%, boosted by higher prices for fresh donuts, which helped the chain offset rising raw material and labor costs.
Shares rose more than 4% in extended trading on Tuesday.
CEO Mike Tattersfield said in an interview that customers are willing to spend more on fresh donuts. In recent years, the company has switched its business to delivering fresh donuts daily to its stores. But its pricing also depends on when people buy the treat.
“Since we have dozens of companies, we have a lot more flexibility in our pricing,” Tattersfield said. “… We’re not a very popular brand. People are still going to celebrate, so they tend to look at the business like, “Yes, I would like to make sure we have fresh donuts from Krispy Kreme.” “
Customers are also willing to pay 50% more for special donuts, Tattersfield said.
Krispy Kreme raised prices in September and plans to raise them even more in the fourth quarter. Tattersfield declined to provide details on how much customers are paying.
In the third fiscal quarter ending October 3, Krispy Kreme reported that its net loss attributable to the company decreased to $ 5.7 million, or 4 cents per share, from a net loss of $ 14.9 million. , or 12 cents per share, a year earlier.
Excluding items, the company’s earnings were 6 cents per share, in line with analysts’ expectations.
According to a survey by Refinitiv analysts, net sales reached $ 342.8 million in the quarter, surpassing Wall Street’s expectations of $ 337.7 million.
Excluding Krispy Kreme’s retirement from the wholesale business, organic revenue grew 14% year-over-year and 22% in two years. The company also owns the Insomnia Cookies cookie network.
Krispy Kreme has confirmed its forecast for the rest of 2021. He projects net revenues of $ 1.34-1.38 billion and organic revenue growth of 10% to 12%. The company also expects adjusted net income of $ 62 million to $ 68 million.
This is the second quarter that Krispy Kreme has shared its results since returning to the public markets in July. The shares have dropped 39% since the initial public offering, bringing them to a market value of $ 2.18 billion. Shares closed more than 4% lower on Tuesday.