Krispy Kreme, Inc. (DNUT) shares plummeted 6.14% in pre-market trading on Thursday following the release of its disappointing second-quarter 2025 financial results. The popular doughnut chain reported a significant net loss and announced a substantial goodwill impairment charge, overshadowing a slight beat in revenue.

For Q2 2025, Krispy Kreme reported revenue of $379.8 million, marginally surpassing the IBES estimate of $378.1 million. However, the company's bottom line took a severe hit, with adjusted earnings per share (EPS) coming in at -$0.15, well below the estimated -$0.03. The adjusted net income was reported at -$25.3 million, significantly worse than the expected -$6.55 million. Adding to the company's woes, Krispy Kreme recognized a cumulative, non-cash partial goodwill impairment charge of $356.0 million in Q2.

The company attributed part of its poor performance to unsustainable operating costs relative to unit demand in its McDonald's USA partnership. In response to these challenges, Krispy Kreme has implemented a comprehensive turnaround plan. The plan focuses on deleveraging the balance sheet and driving sustainable, profitable growth, with an emphasis on maximizing U.S. expansion and adopting a capital-light international franchise model. Despite the current setbacks, the company expressed optimism, stating they expect to begin recouping profitability in Q3. Investors will be closely watching to see if Krispy Kreme can successfully execute its turnaround strategy in the coming quarters.