Krispy Kreme, Inc. (DNUT) shares are plummeting 19.40% in pre-market trading on Thursday following the release of disappointing first-quarter 2025 financial results and several concerning announcements. The iconic doughnut chain is facing significant challenges that have shaken investor confidence.

The company reported Q1 revenue of $375.2 million, falling short of the estimated $384.4 million and representing a 15.25% decrease from the same period last year. Adjusted EBITDA came in at $24 million, missing the expected $29.3 million, with an adjusted EBITDA margin of 6.4%. Krispy Kreme posted a net loss of $33.4 million for the quarter, with adjusted earnings per share at -$0.05, meeting analysts' expectations but down from $0.07 in the previous year.

Adding to investor concerns, Krispy Kreme announced the withdrawal of its full-year outlook, citing uncertain market conditions. The company also revealed it would no longer pay quarterly cash dividends to common stockholders, a move likely aimed at preserving cash. Furthermore, management stated they do not expect to launch in any additional restaurants in Q2 of 2025, signaling a pause in expansion plans. These factors combined have led to a significant sell-off in Krispy Kreme shares, as investors reassess the company's growth prospects and financial stability.