Krispy Kreme, Inc. (NASDAQ: DNUT) saw its shares plummet 6.14% in pre-market trading on Thursday following the release of its disappointing second-quarter 2025 financial results. The iconic doughnut chain reported a substantial net loss and missed key earnings estimates, raising concerns among investors about the company's near-term prospects.

For the second quarter ended June 29, Krispy Kreme reported a staggering net loss of $441.1 million, with revenue declining 13.5% year-over-year to $379.8 million. While revenue slightly beat the IBES estimate of $378.1 million, the company's adjusted earnings per share (EPS) of -$0.15 fell significantly short of the -$0.03 estimate. Additionally, adjusted EBITDA came in at $20.1 million, well below the expected $32.2 million, with an adjusted EBITDA margin of just 5.3%.

The poor financial performance was largely attributed to unsustainable operating costs relative to unit demand in its partnership with McDonald's USA. Krispy Kreme recognized a cumulative, non-cash partial goodwill impairment charge of $356.0 million in Q2, further impacting its bottom line. In response to these challenges, the company has implemented a comprehensive turnaround plan, which includes restructuring its joint venture with WKS Restaurant Group in the Western U.S. and reducing its ownership stake. Krispy Kreme expects to begin recouping profitability in Q3 and is focusing on deleveraging its balance sheet while driving sustainable, profitable growth through U.S. expansion and adopting a capital-light international franchise model.