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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________

FORM 8-K
_________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 9, 2023
Date of Report (Date of earliest event reported)
_________________________

Image_0.jpg
Krispy Kreme, Inc.
(Exact name of registrant as specified in its charter)
_________________________

Delaware001-4057337-1701311
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
2116 Hawkins Street, Charlotte, North Carolina 28203
(Address of principal executive offices)

(800) 457-4779
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)
_________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-14(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.01 par value per share
DNUT
NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition.
The information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
On November 9, 2023, Krispy Kreme, Inc. (the "Company") issued a press release announcing the Company's financial results for the third quarter ended October 1, 2023. A copy of such press release is attached as Exhibit 99.1 and is also available on the Company’s website at investors.krispykreme.com.
Item 9.01. Financial Statements and Exhibits.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

KRISPY KREME, INC.

Dated: November 9, 2023

By:    /s/ Jeremiah Ashukian
Name:Jeremiah Ashukian
Title:Chief Financial Officer

EXHIBIT 99.1

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Krispy Kreme Reports Third Quarter 2023 Results
Net Revenue grew 7.9% and Organic Revenue grew 9.6% with strong momentum to start Q4
Reaffirms mid-to-high end of Revenue and Adjusted EBITDA guidance
CHARLOTTE, NC (November 9, 2023) – Krispy Kreme, Inc. (NASDAQ: DNUT) (“Krispy Kreme” or the “Company”) today reported financial results for the third quarter ended October 1, 2023.
Third Quarter Highlights (vs Q3 2022)
•Net Revenue grew 7.9% to $407.4 million
•Organic Revenue grew 9.6% to $400.3 million
•GAAP Net Loss of $40.3 million primarily driven by non-cash, income tax expense accrual
•Adjusted EBITDA grew 13.5% to $43.7 million
•Adjusted EBITDA margins improved 50 basis points to 10.7%
•Global Points of Access growth accelerated, increasing 1,691, or 14.4%, to 13,394
“Our third quarter results showed the strength of our team, business model, and the power of our brand. We delivered revenue and Adjusted EBITDA growth, while delivering Adjusted EBITDA margin expansion through our hub and spoke model. Our global expansion continued, and our doughnuts became available in two new markets, Switzerland and Kazakhstan, and Insomnia Cookies expanded internationally into Canada and the United Kingdom. Overall, Global Points of Access growth accelerated, increasing by 1,691 or 14.4% year-over-year to 13,394,” stated CEO Mike Tattersfield. “We delivered the joy that is Krispy Kreme through powerful specialty doughnut offerings including the popular M&Ms collection, which was available in 17 countries, our extremely successful limited time offering with Pumpkin Spice, and an innovative new partnership with Hailey Bieber to promote her Krispy Kreme inspired strawberry glazed peptide lip treatment.”
Mike continued, “The path forward for Krispy Kreme remains incredibly exciting. Momentum continues into the seasonally strong fourth quarter enhanced by continued growth in global Points of Access, and a robust Halloween Scooby-Doo offering. We expect to open in Ecuador and France in the fourth quarter taking our new market openings to seven in 2023. We are also excited about our continued partnership with McDonald’s, which we believe has validated the attractiveness of the quick-service restaurant channel. While nothing has been finalized, we are in advanced discussions about expanding the partnership and are making investments in the U.S. that reflect our confidence in further scaling our Delivered Fresh Daily network. I could not be more excited to watch Krispy Kreme become the most loved sweet treat brand in the world and follow the Company’s continued success as Josh Charlesworth takes on the CEO position in 2024.”
Financial Highlights
$ in millions, except per share dataQ3
2023		vs Q3
2022		Q1-Q3 2023vs. Q1-Q3 2022
Net Revenue$407.4+7.9%$1,235.2+9.8%
Organic Revenue (1)
$400.3+9.6%$1,229.6+11.8%
GAAP Net Loss$(40.3)(240.0)%$(38.5)(394.6)%
Adjusted Net Income, Diluted (1)
$4.4(3.6)%$31.10.5%
GAAP Operating (Loss)/Income$(2.1)(105.7)%$18.5(22.3)%
GAAP Operating (Loss)/Income Margin(0.5)%-20 bps1.5%-60 bps
Adjusted EBITDA (1)
$43.7+13.5%$147.5+9.4%
Adjusted EBITDA Margin (1)
10.7%+50 bps11.9%-10 bps
GAAP Diluted EPS$(0.24)$(0.16)$(0.24)$(0.16)
Adjusted Diluted EPS (1)
$0.03$0.00$0.18$0.00
Notes:
(1)Non-GAAP figures – please refer to Reconciliation of Non-GAAP Financial Measures.



Key Operating Metrics
$ in millions, except access pointsQ3
2023		vs Q3
2022		vs Q2
2023
Global Points of Access13,394+14.4%+4.1%
Sales per Hub (U.S.) TTM$4.8+9.1%+2.1%
Sales per Hub (International) TTM$9.90.0%(4.8)%
Ecommerce as a Percent of Retail Sales18.6%+10 bps-20 bps
Third Quarter 2023 Consolidated Results
Krispy Kreme’s third quarter 2023 results reflect continued year-over-year growth as compared to the third quarter of 2022. Net Revenue grew 7.9% to $407.4 million. Total Company Organic Revenue grew 9.6% in the quarter, led by the U.S., which delivered 10.2% organic growth in the quarter driven by growth across all sales channels, including Delivered Fresh Daily (“DFD”) doors, Doughnut Shops and Cookie Bakeries, and Ecommerce.
GAAP net loss for the quarter was $40.3 million, compared to a GAAP net loss of $11.8 million in 2022, due to the forecasted effective tax rate and attributable non-cash income tax expense. Adjusted Net Income, Diluted, decreased 3.6% to $4.4 million in the quarter. Adjusted EBITDA in the quarter grew in excess of revenue at 13.5% to $43.7 million, driven by improved profitability across each of our reportable segments. Adjusted EBITDA margins improved 50 basis points to 10.7% driven by efficiencies in and expansion of our hub and spoke model, as well as pricing actions taken throughout the quarter and from earlier in 2023. GAAP diluted EPS in the quarter was a $0.24 loss per share compared to a loss per share of $0.08 in the same quarter last year, while adjusted diluted EPS was flat compared to last year at $0.03 despite elevated interest rates.
Third Quarter 2023 Market Segment Results (vs Q3 2022)
U.S.: In the U.S. segment, net revenue grew $13.3 million, or approximately 5.4%, and organic revenue increased $23.9 million, or approximately 10.2%. Organic growth was driven by successful marketing activations, pricing actions, and the expansion of our DFD strategy. Sales per hub in the U.S. increased 9.1% to $4.8 million and DFD average sales per door increased 11.6% to $613 per week, with an additional 786 doors. Additionally, Ecommerce as a percent of retail sales grew 150 basis points, or $4.8 million.
U.S. Adjusted EBITDA increased 8.8% to $22.3 million with Adjusted EBITDA margin expansion of 30 basis points to 8.6%. This was primarily driven by the productivity benefits of the expansion of our hub and spoke model.
International: In the International segment, net revenue grew $14.2 million, or approximately 15.4%, aided by foreign currency translation impacts of $6.7 million from a weakening U.S. dollar. International organic revenue grew $7.5 million, or approximately 8.2%, with organic growth across all of our markets, driven by pricing and strong Points of Access growth of 416, or 12%.
International Adjusted EBITDA grew 17.3% to $21.4 million with Adjusted EBITDA margin expansion of 30 basis points to 20.2%, primarily driven by the U.K. and Australia where pricing and cost control initiatives continue to prove effective.
Market Development: In the Market Development segment, net revenue increased $2.3 million, or approximately 5.9%, despite lapping one-time franchise equipment sales and the impact of certain foreign currencies devaluing against the U.S. dollar. When adjusted for the impacts of acquisitions and foreign currency, Market Development organic revenue grew $3.5 million, or approximately 9.1%, driven by strong organic growth in Japan and Canada, and new markets openings including Kazakhstan and Switzerland.
Market Development Adjusted EBITDA grew 13.3% to $13.4 million with Adjusted EBITDA margin expansion of 220 basis points to 32.6% driven mainly by hub and spoke efficiencies in our company-owned Japan and Canada businesses.
Balance Sheet & Capital Expenditures
During the third quarter of 2023, the Company invested $34.3 million in capital expenditures, or 8.4% of revenue, primarily to support new store development, international expansion and the growth of our omni-channel strategy preparing for expansion in the QSR channel.
As of October 1, 2023 the Company had total available liquidity of $196.2 million, including $25.7 million of cash and cash equivalents plus undrawn capacity of $170.5 million under available credit facilities, and net debt of $849.8 million.


2023 Financial Outlook
With the exception of capital expenditures and interest expense, the Company is reiterating its outlook for the full year 2023 as follows:
•Net Revenue of $1.65 billion to $1.68 billion, +8% to +10% vs 2022 (+9% to +11% in constant currency)
•Organic Revenue growth of 9% to 11%
•Adjusted EBITDA of $205 million to $215 million, +8% to +13% vs 2022 (+10% to +14% in constant currency)
•Adjusted Net Income, Diluted, of $52 million to $58 million, +5% to +17% vs 2022 (+9% to +21% in constant currency)
•Adjusted Diluted EPS of $0.31 to $0.34, +7% to +17% vs 2022 (+10% to +21% in constant currency)
•Adjusted Income Tax rate between 24.5% to 26.0%
•Capital Expenditures of approximately 7% to 8% of revenue; updated from 6.6% driven by investments to support the growth of the business and foreign exchange rates
•Interest Expense, net between $47 million to $51 million; updated from $39 to $43 million driven by the reduction of vendor financing and higher prevailing interest rates
•The Company continues to expect to reduce its net leverage in 2023, as we make progress towards our 2026 goal of approximately 2.0x to 2.5x net leverage
As noted above, the Company continues to trend toward the middle to the higher end of the revenue and adjusted EBITDA ranges. Additionally, on October 3, 2023, the Company announced it is exploring strategic alternatives for Insomnia Cookies, which includes consideration of an all-cash sale. Guidance for the full year 2023 includes operations from Insomnia Cookies and, if a divestiture occurs, final results may reflect separation of Insomnia Cookies' operations.
Definitions
The following definitions apply to terms used throughout this press release:
•Global Points of Access: Reflects all locations at which fresh doughnuts or cookies can be purchased. We define global points of access to include all Hot Light Theater Shops, Fresh Shops, Carts and Food Trucks, DFD Doors and Cookie Bakeries, at both Company-owned and franchise locations as of the end of the respective reporting period. We monitor global points of access as a metric that informs the growth of our omni-channel presence over time and believe this metric is useful to investors to understand our footprint in each of our segments.
•Hubs: Reflects locations where fresh doughnuts are produced and processed for sale at any point of access. We define Hubs to include self-sustaining Hot Light Theater Shops and Doughnut Factories, at both Company-owned and franchise locations as of the end of the respective reporting period.
•Sales Per Hub: Sales per Hub equals Fresh Revenues from Hubs with Spokes, divided by the average number of Hubs with Spokes at the end of the five most recent quarters.
•Fresh Revenues from Hubs with Spokes: Fresh Revenues include product sales generated from our Doughnut Shop business (including Ecommerce and delivery), as well as DFD sales, but excluding sales from our legacy wholesale business and our Branded Sweet Treat Line. It also excludes all Insomnia Cookies revenues as the measure is focused on the Krispy Kreme business. Fresh Revenues from Hubs with Spokes equals the Fresh Revenues derived from those Hubs currently producing product for other shops, Carts and Food Trucks, and/or DFD Doors, but excluding Fresh Revenues derived from those Hubs not currently producing product for other shops, Carts and Food Trucks, and/or DFD Doors.
•Total Net Leverage Ratio: Calculated using Net Debt (including both bank debt and financing leases as part of debt) divided by Adjusted EBITDA.
•Free Cash Flow: Defined as cash provided by operating activities less purchases of property and equipment.
Conference Call
Krispy Kreme will host a public conference call at 8:30 AM Eastern Time today to discuss its results for the third quarter of 2023. The conference call can be accessed by dialing 1 (800) 599-5188 and entering the conference ID 5487868. International participants can access the call via the corresponding number listed here and entering the conference ID 5487868. To listen to the live audio webcast and Q&A, visit the Krispy Kreme investor relations website at investors.krispykreme.com. A replay and transcript of the webcast will be available on the website within 24 hours after the call. Krispy Kreme’s earnings press release and related materials will also be available on the investor relations section of the Company’s website.


Investor Relations
Stephanie Daukus
ir@krispykreme.com
Financial Media
Edelman Smithfield for Krispy Kreme, Inc.
Ashley Firlan & Ashna Vasa, KrispyKremeIR@edelman.com
About Krispy Kreme
Headquartered in Charlotte, N.C., Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Our iconic Original Glazed® doughnut is universally recognized for its hot-off-the-line, melt-in-your-mouth experience. Krispy Kreme operates in more than 35 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing Ecommerce and delivery business with more than 13,000 fresh points of access. Our purpose of touching and enhancing lives through the joy that is Krispy Kreme guides how we operate every day and is reflected in the love we have for our people, our communities and the planet. Connect with Krispy Kreme Doughnuts at www.KrispyKreme.com, or on one of its many social media channels, including www.Facebook.com/KrispyKreme and www.Twitter.com/KrispyKreme.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. The words “continue,” “towards,” “expect,” “outlook,” “guidance,” or similar words, or the negative of these words, identify forward-looking statements. Such forward-looking statements are based on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended January 1, 2023, filed by us with the Securities and Exchange Commission (“SEC”) and described in the other filings we make from time to time with the SEC. We believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
Non-GAAP Measures
This press release includes certain non-GAAP financial measures including organic revenue growth, Adjusted EBITDA, Adjusted Net Income, Diluted, Adjusted Diluted EPS, Fresh Revenue from Hubs with Spokes, and Sales per Hub, which differ from results using U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP financial measures in conjunction with our historical consolidated financial statements and notes thereto filed with the SEC.
To the extent that the Company provides guidance, it does so only on a non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inability to predict the amount and timing of impacts outside of the Company’s control on certain items, such as net income and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.


Krispy Kreme, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
Quarter EndedThree Quarters Ended
October 1,
2023 (13 weeks)		October 2,
2022 (13 weeks)		October 1,
2023 (39 weeks)		October 2,
2022 (39 weeks)
Net revenues
Product sales$398,745 $370,216 $1,209,767 $1,102,045 
Royalties and other revenues8,622 7,306 25,432 23,254 
Total net revenues407,367 377,522 1,235,199 1,125,299 
Product and distribution costs101,353 102,870 330,292 299,539 
Operating expenses195,380 177,592 575,953 520,260 
Selling, general and administrative expense68,305 54,801 192,355 160,266 
Marketing expenses12,478 10,995 32,101 32,369 
Pre-opening costs1,059 1,200 2,927 3,514 
Other (income)/expenses, net(1,102)2,964 (6,051)1,800 
Depreciation and amortization expense32,007 28,127 89,142 83,782 
Operating (loss)/income(2,113)(1,027)18,480 23,769 
Interest expense, net12,807 8,871 36,858 23,808 
Other non-operating expense, net971 1,648 3,031 2,083 
Loss before income taxes(15,891)(11,546)(21,409)(2,122)
Income tax expense24,367 294 17,121 5,668 
Net loss(40,258)(11,840)(38,530)(7,790)
Net income attributable to noncontrolling interest199 1,216 2,005 5,113 
Net loss attributable to Krispy Kreme, Inc.$(40,457)$(13,056)$(40,535)$(12,903)
Net loss per share:
Common stock — Basic$(0.24)$(0.08)$(0.24)$(0.08)
Common stock — Diluted$(0.24)$(0.08)$(0.24)$(0.08)
Weighted average shares outstanding:
Basic168,224 167,431 168,183 167,353 
Diluted168,224 167,431 168,183 167,353 


Krispy Kreme, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
As of
 (Unaudited) October 1,
2023		January 1,
2023
ASSETS
Current assets:
Cash and cash equivalents$25,711 $35,371 
Restricted cash430 359 
Accounts receivable, net49,854 51,089 
Inventories35,063 46,239 
Taxes receivable17,886 18,263 
Prepaid expense and other current assets31,118 26,953 
Total current assets160,062 178,274 
Property and equipment, net517,528 472,358 
Goodwill1,092,000 1,087,908 
Other intangible assets, net949,463 966,088 
Operating lease right of use asset, net448,569 417,381 
Other assets19,581 26,528 
Total assets$3,187,203 $3,148,537 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$43,492 $40,034 
Current operating lease liabilities49,408 43,160 
Accounts payable178,725 225,276 
Accrued liabilities164,577 104,424 
Structured payables88,838 103,575 
Total current liabilities525,040 516,469 
Long-term debt, less current portion827,429 739,052 
Noncurrent operating lease liabilities441,732 412,759 
Deferred income taxes, net109,925 143,124 
Other long-term obligations and deferred credits34,067 38,258 
Total liabilities1,938,193 1,849,662 
Commitments and contingencies
Shareholders’ equity:
Common stock,$0.01 par value; 300,000 shares authorized as of both October 1, 2023 and January 1, 2023; 168,594 and 168,137 shares issued and outstanding as of October 1, 2023 and January 1, 2023, respectively
1,686 1,681 
Additional paid-in capital1,437,488 1,426,105 
Shareholder note receivable(3,820)(4,813)
Accumulated other comprehensive loss, net of income tax(7,516)(9,151)
Retained deficit(275,698)(217,490)
Total shareholders’ equity attributable to Krispy Kreme, Inc.1,152,140 1,196,332 
Noncontrolling interest96,870 102,543 
Total shareholders’ equity1,249,010 1,298,875 
Total liabilities and shareholders’ equity$3,187,203 $3,148,537 


Krispy Kreme, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 Three Quarters Ended
 October 1, 2023 (39 weeks)October 2, 2022 (39 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net loss$(38,530)$(7,790)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense89,142 83,782 
Deferred income taxes12,634 (10,259)
Loss on extinguishment of debt472 — 
Impairment and lease termination charges7,711 7,255 
Gain on disposal of property and equipment(168)(244)
Gain on sale-leaseback(9,646)(4,311)
Share-based compensation17,821 13,318 
Change in accounts and notes receivable allowances504 378 
Inventory write-off10,522 388 
Settlement of interest rate swap derivatives7,657 — 
Amortization related to settlement of interest rate swap derivatives(7,334)— 
Other566 804 
Change in operating assets and liabilities, excluding business acquisitions and foreign currency translation adjustments(47,319)(12,591)
Net cash provided by operating activities44,032 70,730 
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Purchase of property and equipment(88,605)(75,002)
Proceeds from disposals of assets202 856
Proceeds from sale-leaseback10,025 5,700 
Acquisition of shops and franchise rights from franchisees, net of cash acquired— (17,335)
Purchase of equity method investment— (989)
Other investing activities20 (931)
Net cash used for investing activities(78,358)(87,701)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of debt1,044,698 121,500 
Repayment of long-term debt and lease obligations(965,250)(70,180)
Payment of financing costs(5,000)— 
Proceeds from structured payables145,099 219,459 
Payments on structured payables(159,571)(211,778)
Payment of contingent consideration related to a business combination(925)(900)
Capital contribution by shareholders, net of loans issued631 (288)
Payments of issuance costs in connection with IPO— (12,458)
Proceeds from sale of noncontrolling interest in subsidiary— 410 
Distribution to shareholders(17,657)(17,570)
Payments for repurchase and retirement of common stock(1,609)(2,425)
Distribution to noncontrolling interest(12,883)(11,525)
Net cash provided by financing activities27,533 14,245 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2,796)(7,967)
Net decrease in cash, cash equivalents and restricted cash(9,589)(10,693)
Cash, cash equivalents and restricted cash at beginning of period35,730 39,192 
Cash, cash equivalents and restricted cash at end of period$26,141 $28,499 
Net cash provided by operating activities$44,032 $70,730 
Less: Purchase of property and equipment(88,605)(75,002)
Free cash flow$(44,573)$(4,272)


Krispy Kreme, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share amounts)
We define “Adjusted EBITDA” as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, and other certain non-recurring, infrequent or non-core income and expense items. Adjusted EBITDA is a principal metric that management uses to monitor and evaluate operating performance and provides a consistent benchmark for comparison across reporting periods.
We define “Adjusted Net Income, Diluted” as net loss attributable to common shareholders, adjusted for interest expense, share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, the tax impact of adjustments, and other certain non-recurring, infrequent or non-core income and expense items. “Adjusted EPS” is Adjusted Net Income, Diluted converted to a per share amount.
Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS have certain limitations, including adjustments for income and expense items that are required by GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses that are the same as or similar to some of the adjustments in this presentation, such as share-based compensation. Our presentation of Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA, Adjusted Net Income, Diluted, and Adjusted EPS supplementally.
Quarter Ended Three Quarters Ended
(in thousands)October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Net loss$(40,258)$(11,840)$(38,530)$(7,790)
Interest expense, net12,807 8,871 36,858 23,808 
Income tax expense24,367 294 17,121 5,668 
Depreciation and amortization expense32,007 28,127 89,142 83,782 
Share-based compensation7,452 2,825 17,821 13,318 
Employer payroll taxes related to share-based compensation96 2 310 92 
Other non-operating expense, net (1)
971 1,648 3,031 2,083 
Strategic initiatives (2)
5,895 86 23,841 206 
Acquisition and integration expenses (3)
49 790 479 1,389 
New market penetration expenses (4)
678 313 1,013 683 
Shop closure (income)/expenses, net (5)
(449)5,735 356 7,859 
Restructuring and severance expenses (6)
552 2,328 2,799 2,804 
Gain on sale-leaseback— (1,937)(9,646)(4,311)
Other (7)
(426)1,300 2,888 5,219 
Adjusted EBITDA$43,741 $38,542 $147,483 $134,810 
Quarter Ended Three Quarters Ended
(in thousands)October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Segment Adjusted EBITDA:
U.S.
$22,258 $20,452 $88,878 $77,014 
International
21,406 18,254 54,436 55,033 
Market Development
13,371 11,797 46,071 36,642 
Corporate
(13,294)(11,961)(41,902)(33,879)
Adjusted EBITDA$43,741 $38,542 $147,483 $134,810 


Quarter Ended Three Quarters Ended
(in thousands, except per share amounts)
October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Net loss$(40,258)$(11,840)$(38,530)$(7,790)
Share-based compensation7,452 2,825 17,821 13,318 
Employer payroll taxes related to share-based compensation96 2 310 92 
Other non-operating expense, net (1)
971 1,648 3,031 2,083 
Strategic initiatives (2)
5,895 86 23,841 206 
Acquisition and integration expenses (3)
49 790 479 1,389 
New market penetration expenses (4)
678 313 1,013 683 
Shop closure (income)/expenses, net (5)
(449)5,735 356 8,109 
Restructuring and severance expenses (6)
552 2,328 2,799 2,804 
Gain on sale-leaseback— (1,937)(9,646)(4,311)
Other (7)
(426)1,300 2,888 5,219 
Amortization of acquisition related intangibles (8)
7,386 7,083 22,027 21,307 
Loss on extinguishment of 2019 Facility (9)
— — 472 — 
Tax impact of adjustments (10)
22,694 (2,470)8,574 (5,889)
Tax specific adjustments (11)
(28)— (2,343)(628)
Net income attributable to noncontrolling interest(199)(1,216)(2,005)(5,113)
Adjustment to adjusted net income attributable to common shareholders— — — (374)
Adjusted net income attributable to common shareholders - Basic$4,413 $4,647 $31,087 $31,105 
Additional income attributed to noncontrolling interest due to subsidiary potential common shares(7)(76)(14)(174)
Adjusted net income attributable to common shareholders - Diluted$4,406 $4,571 $31,073 $30,931 
Basic weighted average common shares outstanding168,224 167,431 168,183 167,353 
Dilutive effect of outstanding common stock options, RSUs, and PSUs2,421 1,822 2,249 2,006 
Diluted weighted average common shares outstanding170,645 169,253 170,432 169,359 
Adjusted net income per share attributable to common shareholders:
Basic$0.03$0.03$0.18$0.19
Diluted$0.03$0.03$0.18$0.18
(1)Primarily foreign translation gains and losses in each period.
(2)The quarter and three quarters ended October 1, 2023 consist primarily of costs associated with global transformation and U.S. initiatives such as the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs.
(3)Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period.
(4)Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including the Insomnia Cookies brand entering Canada and the U.K.
(5)Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. The quarter and three quarters ended October 1, 2023 include gains related to the termination of leases at certain Krispy Kreme shops in the U.S. where the Company had already recognized impairment of the corresponding right of use assets in a prior period.
(6)The quarter and three quarters ended October 1, 2023 and October 2, 2022 consist primarily of costs associated with restructuring of the global executive team.
(7)The quarter and three quarters ended October 1, 2023 and October 2, 2022 consist primarily of legal and other regulatory expenses incurred outside the ordinary course of business.
(8)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the Condensed Consolidated Statements of Operations.
(9)Includes interest expenses related to unamortized debt issuance costs from the 2019 Facility associated with extinguished lenders as a result of the March 2023 debt refinancing.
(10)Tax impact of adjustments calculated applying the applicable statutory rates. The quarter and three quarters ended October 1, 2023 and October 2, 2022 also include the impact of disallowed executive compensation expense.
(11)The quarter and three quarters ended October 1, 2023 consist of the recognition of a previously unrecognized tax benefit unrelated to ongoing operations, the effect of tax law changes on existing temporary differences, and a discrete tax benefit unrelated to ongoing operations.


Krispy Kreme, Inc.
Segment Reporting (Unaudited)
(in thousands, except percentages or otherwise stated)
 Quarter Ended Three Quarters Ended
 October 1, 2023October 2, 2022October 1, 2023October 2, 2022
Net revenues:
 
 
 
 
U.S.$260,177 $246,830 $808,938 $739,414 
International106,130 91,934 294,750 272,988 
Market Development41,060 38,758 131,511 112,897 
Total net revenues$407,367 $377,522 $1,235,199 $1,125,299 
Q3 2023 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in third quarter of fiscal 2023$260,177 $106,130 $41,060 $407,367 
Total net revenues in third quarter of fiscal 2022246,830 91,934 38,758 377,522 
Total Net Revenues Growth13,347 14,196 2,302 29,845 
Total Net Revenues Growth %5.4 %15.4 %5.9 %7.9 %
Less: Impact of shop optimization closures(3,096)— — (3,096)
Less: Impact of Branded Sweet Treats exit(9,035)— — (9,035)
Adjusted net revenues in third quarter of fiscal 2022234,699 91,934 38,758 365,391 
Adjusted net revenue growth25,478 14,196 2,302 41,976 
Impact of acquisitions(1,575)— 457 (1,118)
Impact of foreign currency translation— (6,677)765 (5,912)
Organic Revenue Growth$23,903 $7,519 $3,524 $34,946 
Organic Revenue Growth %10.2 %8.2 %9.1 %9.6 %
Q3 2023 Organic Revenue - YTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first three quarters of fiscal 2023$808,938 $294,750 $131,511 $1,235,199 
Total net revenues in first three quarters of fiscal 2022739,414 272,988 112,897 1,125,299 
Total Net Revenues Growth69,524 21,762 18,614 109,900 
Total Net Revenues Growth %9.4 %8.0 %16.5 %9.8 %
Less: Impact of shop optimization closures(9,613)— — (9,613)
Less: Impact of Branded Sweet Treats exit(15,736)— — (15,736)
Adjusted net revenues in first three quarters of fiscal 2022714,065 272,988 112,897 1,099,950 
Adjusted net revenue growth94,873 21,762 18,614 135,249 
Impact of acquisitions(7,678)— 2,227 (5,451)
Impact of foreign currency translation— (4,593)4,475 (118)
Organic Revenue Growth$87,195 $17,169 $25,316 $129,680 
Organic Revenue Growth %12.2 %6.3 %22.4 %11.8 %


Q3 2022 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in third quarter of fiscal 2022$246,830 $91,934 $38,758 $377,522 
Total net revenues in third quarter of fiscal 2021225,807 87,262 29,730 342,799 
Total Net Revenues Growth21,023 4,672 9,028 34,723 
Total Net Revenues Growth %9.3 %5.4 %30.4 %10.1 %
Impact of acquisitions(1,030)— (3,862)(4,892)
Impact of foreign currency translation— 8,890 2,564 11,454 
Organic Revenue Growth$19,993 $13,562 $7,730 $41,285 
Organic Revenue Growth %8.9 %15.5 %26.0 %12.0 %
Q3 2022 Organic Revenue - YTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first three quarters of fiscal 2022$739,414 $272,988 $112,897 $1,125,299 
Total net revenues in first three quarters of fiscal 2021679,195 243,005 91,594 1,013,794 
Total Net Revenues Growth60,219 29,983 21,303 111,505 
Total Net Revenues Growth %8.9 %12.3 %23.3 %11.0 %
Impact of acquisitions(4,955)— (10,653)(15,608)
Impact of foreign currency translation— 18,843 5,769 24,612 
Organic Revenue Growth$55,264 $48,826 $16,419 $120,509 
Organic Revenue Growth %8.1 %20.1 %17.9 %11.9 %
Sales per HubTrailing Four Quarters EndedFiscal Year Ended
(in thousands, unless otherwise stated)October 1, 2023January 1, 2023January 2, 2022
U.S.:
Revenues$1,079,774 $1,010,250 $923,129 
Non-Fresh Revenues (1)
(18,488)(38,380)(37,311)
Fresh Revenues from Insomnia Cookies and Hubs without Spokes (2)
(400,567)(404,430)(414,899)
Sales from Hubs with Spokes 660,719 567,440 470,919 
Sales per Hub (millions)4.8 4.5 4.0 
International:
Sales from Hubs with Spokes (3)
$387,678 $365,916 $332,995 
Sales per Hub (millions) (4)
9.9 9.9 8.6 
(1)Includes the exited Branded Sweet Treats business revenues.
(2)Includes Insomnia Cookies revenues and Fresh Revenues generated by Hubs without Spokes.
(3)Total International net revenues is equal to Fresh Revenues from Hubs with Spokes for that business segment.
(4)International Sales per Hub comparative data has been restated in constant currency based on current exchange rates.


Krispy Kreme, Inc.
Global Points of Access (Unaudited)
Global Points of Access (1)
Quarter EndedFiscal Year Ended
October 1, 2023October 2, 2022January 1, 2023
U.S.: (2)
Hot Light Theater Shops229 240 234 
Fresh Shops65 61 62 
Cookie Bakeries247 227 231 
Carts, Food Trucks, and Other (3)
— 1 — 
DFD Doors (5)
6,506 5,720 5,729 
Total7,047 6,249 6,256 
International:
Hot Light Theater Shops36 35 37 
Fresh Shops410 384 388 
Carts, Food Trucks, and Other (3)
16 12 14 
DFD Doors
3,393 3,008 3,032 
Total3,855 3,439 3,471 
Market Development: (4)
Hot Light Theater Shops122 111 115 
Fresh Shops989 809 873 
Cookie Bakeries2——
Carts, Food Trucks, and Other (3)
29 29 27 
DFD Doors
1,350 1,066 1,095 
Total2,492 2,015 2,110 
Total Global Points of Access (as defined)13,394 11,703 11,837 
Total Hot Light Theater Shops387 386 386 
Total Fresh Shops1,464 1,254 1,323 
Total Cookie Bakeries249 227 231 
Total Shops2,100 1,867 1,940 
Total Carts, Food Trucks, and Other45 42 41 
Total DFD Doors11,249 9,794 9,856 
Total Global Points of Access (as defined)13,394 11,703 11,837 
(1)Excludes the recently exited Branded Sweet Treats distribution points.
(2)Includes Points of Access that were acquired from a franchisee in the U.S. in the third quarter of fiscal 2022. These Points of Access were previously included in the Market Development segment prior to the acquisition date.
(3)Carts and Food Trucks are non-producing, mobile (typically on wheels) facilities without walls or a door where product is received from a Hot Light Theater Shop or Doughnut Factory. Other includes a vending machine. Points of Access in this category are primarily found in international locations in airports, train stations, etc.
(4)Includes locations in Japan and Canada, which are Company-owned. All remaining Points of Access in the Market Development segment relate to our franchise business.
(5)Includes over 160 McDonald’s test shops located in Louisville and Lexington, Kentucky and the surrounding area as of October 1, 2023.


Krispy Kreme, Inc.
Global Hubs (Unaudited)
Hubs
Quarter EndedFiscal Year Ended
October 1, 2023October 2, 2022January 1, 2023
U.S.:
Hot Light Theater Shops (1)
222 237 228 
Doughnut Factories4 4 4 
Total226 241 232 
Hubs with Spokes148 126 133 
Hubs without Spokes78 115 99 
International:
Hot Light Theater Shops (1)
30 26 28 
Doughnut Factories11 11 11 
Total41 37 39 
Hubs with Spokes41 37 39 
Market Development:
Hot Light Theater Shops (1)
115 107 110 
Doughnut Factories26 26 27 
Total141 133 137 
Total Hubs408 411 408 
(1)Includes only Hot Light Theater Shops and excludes Mini Theaters. A Mini Theater is a Spoke location that produces some doughnuts for itself and also receives doughnuts from another producing location.


Krispy Kreme, Inc.
Net Debt and Leverage (Unaudited)
(in thousands, except leverage ratio)
(in thousands, except leverage ratio) 
October 1, 2023January 1, 2023
Current portion of long-term debt$43,492 $40,034 
Long-term debt, less current portion827,429 739,052 
Total long-term debt, including debt issuance costs
870,921 779,086 
Add back: Debt issuance costs4,634 2,247 
Total long-term debt, excluding debt issuance costs
875,555 781,333 
Less: Cash and cash equivalents(25,711)(35,371)
Net debt$849,844 $745,962 
Adjusted EBITDA - trailing four quarters203,402 190,729 
Net leverage ratio4.2 x3.9 x

v3.23.3
Cover Page Document
Nov. 09, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 09, 2023
Entity Registrant Name Krispy Kreme, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40573
Entity Tax Identification Number 37-1701311
Entity Address, Address Line One 2116 Hawkins Street
Entity Address, City or Town Charlotte
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28203
City Area Code 800
Local Phone Number 457-4779
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol DNUT
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001857154
Amendment Flag false
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