MW Krispy Kreme scraps dividend to save cash, and the stock sinks to record low

By Tomi Kilgore

Doughnut seller misses quarterly sales expectations and withdraws its full-year outlook citing a slowing economy

Shares of Krispy Kreme Inc. tumbled into record-low territory in early Thursday trading, after the doughnut seller reported disappointing earnings and said it would no longer pay a dividend, as it looks to save cash and pay down debt.

The company $(DNUT)$ also withdrew its full-year earnings outlook, citing a slowing economy and uncertainty about the timing of when more of its doughnuts will be sold at participating McDonald's Corp. $(MCD)$ restaurants.

Krispy Kreme's stock sank 23.8% in premarket trading, which put it on track to open well below the current record-low closing price of $3.98 seen on April 16. It was also in danger of having a worse day than the current record 21.9% drop on Feb. 25.

"Following a review of the company's capital allocation strategy and investments available to fuel our growth, the company has made the decision to no longer pay quarterly cash dividends to holders of the company's common stock," Krispy Kreme said in a statement. "This decision provides greater financial flexibility, enabling debt paydown and a focus on profitable, high return growth."

The company last paid a quarterly dividend in April of 3.5 cents a share. The annual dividend at Wednesday's stock closing price implied a dividend yield of 3.23%, which compares with the implied yield for the S&P 500 index SPX of 1.37%.

The company also reported first-quarter revenue that dropped 15.3% from a year ago to $375.2 million, which was below the average analyst estimate compiled by FactSet of $384.4 million.

Sales in the U.S. sank 20.1% to $59.4 million, hurt by the company's sale of its majority stake in Insomnia Cookies, while international sales were down 4.1% to $5.1 million due primarily to unfavorable currency moves.

The net loss for the quarter to March 30 nearly quadrupled to $33.3 million from $8.5 million. On an adjusted basis, which excludes nonrecurring items, such as tax adjustments and expenses related to strategic initiatives, the company swung to a per-share loss of 5 cents from a profit of 7 cents a share, which matched the FactSet consensus.

Separately, the company said its doughnuts were now available in more than 2,400 McDonald's restaurants. However, the company said it was "reassessing" the deployment schedule with McDonald's, while they work out how it to make that business profitable for both parties.

As a result, Krispy Kreme doesn't expect to make its doughnuts available in any more McDonald's restaurants in the second quarter.

"Given macroeconomic softness and the uncertainty around the McDonald's deployment schedule, the company is withdrawing its prior full year outlook and not updating it at this time," Krispy Kreme said.

But for the second quarter, the company expects revenue of $370 million to $385 million, which is below the current FactSet consensus of $393.9 million.

Krispy Kreme's stock has plunged 56.4% in 2025 through Wednesday, while the S&P 500 index SPX has slipped 4.3%.

-Tomi Kilgore

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May 08, 2025 08:14 ET (12:14 GMT)

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