- Shares fall 12%, the biggest one-day drop since June 2014
- Doughnut seller is facing more competition in shops, grocery
Krispy Kreme Doughnuts Inc. fell the most in more than a year after slow sales of packaged-food products hurt results and prompted the company to cut its annual earnings forecast.
The doughnut chain posted quarterly sales and profit on Wednesday that missed analysts’ estimates. Revenue was $127.3 million, the company said in a statement. Analysts projected $132 million, on average. Excluding some items, profit was 15 cents a share, trailing analysts’ 19-cent estimate.
Packaged goods, such as bags of doughnuts and snacks, didn’t perform as well as expected, the company said. It also lost money on derivative instruments. Krispy Kreme may be seeing more competition at grocery and convenience stores that are selling healthier snack and breakfast options.
The company expects its packaged-goods business to remain "softer than planned" for the rest of the year, Chief Executive Officer Anthony Thompson said during a conference call.
The stock fell 12 percent to $15.65 on Thursday, the biggest drop since June 2014. Shares of the Winston-Salem, North Carolina-based company have tumbled 21 percent this year.
Krispy Kreme now expects full-year earnings to be 76 cents to 80 cents a share. The company previously projected 80 cents to 85 cents.
The chain also may be facing more competition from coffee-shop rivals such as Starbucks Corp. and Dunkin’ Donuts, which are selling more packaged foods in their stores. Starbucks recently began offering new bistro boxes, while Dunkin’ has its own granola bars.