By Connor Hart

Krispy Kreme narrowed its loss and expanded margins in the recent quarter as turnaround efforts continued to pay off, though revenue once again declined following last year's move to exit weaker sales locations.

Chief Executive Josh Charlesworth said the doughnut chain remains on track to accelerate growth later this year, pointing to continued retail expansion and strong consumer engagement.

And that return to growth won't require additional capital expenditures, he said.

"We don't have to invest," Charlesworth said in an interview. "We're able to grow without building."

As it closed underperforming doors, Krispy Kreme began reshaping its distribution model to prioritize sales in higher-traffic locations with retail partners such as Walmart, Target and Costco. Krispy Kreme added more than 200 of these locations during the recent quarter, Charlesworth said, yet it still has distribution in only about 30% of those partners' store networks.

Krispy Kreme has also been streamlining operations. The company completed the outsourcing of deliveries to grocery and convenience partners during the latest quarter, a move Charlesworth said should turn a former cost headwind into a tailwind through lower and more predictable logistics expenses.

The company is also leaning more heavily on franchising overseas, where partners shoulder much of the investment required for new shops. Krispy Kreme recently announced plans to enter the Netherlands and expects to open three to four international markets this year.

Combined, these actions prompted the company to reiterate its forecast for systemwide sales growth of 2% to 4% in constant currency this year. It also introduced guidance for net revenue of $1.25 billion to $1.35 billion, as well as adjusted Ebitda--or earnings before interest, taxes, depreciation and amortization--of $140 million to $150 million.

Analysts polled by FactSet had been expecting full-year revenue of $1.45 billion and adjusted Ebitda of $140 million.

Despite broader economic uncertainty during the quarter, Charlesworth said consumers continue to spend on small treats and celebration-focused purchases. Seasonal promotions tied to Valentine's Day, St. Patrick's Day and other events helped drive engagement during the period, he added.

For the first quarter, Krispy Kreme reported a loss of $22.8 million, or 16 cents a share, compared with a loss of $33.3 million, or 22 cents a share, a year earlier. Stripping out one-time items, the company posted an adjusted loss of 5 cents a share, wider than analysts' expectations for an adjusted loss of 2 cents a share.

Revenue ebbed 2.2% to $367 million but topped Wall Street models for $359.4 million.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

May 07, 2026 06:46 ET (10:46 GMT)

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