Krispy Kreme Profit Surges, Lifts FY Outlook; Shares Up 10%

(RTTNews) - Krispy Kreme Doughnuts Inc. (KKD) Tuesday reported a surge in profit for the fourth quarter, reflecting a tax benefit and lower expenses. Nevertheless, both earnings and revenue for the quarter fell short of Wall Street expectations.

Krispy Kreme shares, however, rose 10 percent in extended trade after lifting its full year earnings outlook and increased share buyback plan.

For the fiscal year 2015, Krispy Kreme now expects adjusted earnings of $0.73 to $0.79 per share, up from a prior outlook of $0.71 to $0.76 per share. Analysts polled by Thomson Reuters currently expect earnings of $0.75 per share for 2015. Analysts' estimates typically exclude one-time items.

The company also increased its current share repurchase authorization from $50 million to $80 million.

Krispy Kreme's results have improved after the chain reformed itself by expanding its menu beyond its namesake product and started selling fruit juice, coffee and smoothies.

Winston-Salem, North Carolina-based Krispy Kreme's fourth-quarter profit surged to $14.8 million or $0.21 per share from $4.8 million or $0.07 per share last year. Results for the quarter included income taxes benefit of $5.6 million for the quarter.

On an adjusted basis, earnings for the quarter were $8.3 million or $0.12 per share. On average, five analysts expected earnings of $0.13 per share for the quarter.

The doughnut chain's revenue for the fourth quarter dropped to $112.7 million from $118.1 million last year. However, last year's fourth quarter included 14 weeks. Excluding the extra week, revenues for the quarter rose 3.3 percent. Analysts expected revenues of $119.59 million for the quarter.

Same store sales, or sales from stores open at least a year, for the quarter rose 1.6 percent.

Direct operating expenses dropped to $93.3 million from $98.3 million last year, while general and administrative expenses declined to $7.7 million from $8.8 million.

KKD closed Wednesday's trading at $19.88, up $0.47 or 2.42%, on the NYSE. The stock further gained $2.13 or 10.71% in after-hours trade.