Krispy Kreme earnings climb 139% in Q1

by Eric Schroeder
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WINSTON-SALEM, N.C. — Net income at Krispy Kreme Doughnuts, Inc. soared 139% in the first quarter ended May 2, climbing to $4,468,000, equal to 7c per share on the common stock, from $1,868,000, or 3c per share, in the same period a year ago. Last year’s results included $2,357,000 in impairment charges and lease termination costs, which compared with $1,299,000 in similar charges this quarter.

Sales for the quarter were $92,117,000, down 1% from $93,420,000. Same-store sales at company-owned locations, meanwhile, rose 4.8%.

“We were pleased with the improvement in our first-quarter performance, which included healthy company same-store sales growth and improvements in both consolidated operating income and net income compared to the year-ago period,” said Jim Morgan, president and chief executive officer. “This improvement reflects our continued progress in implementing our strategic initiatives. We look forward to continued success with our transition and believe that our shareholders will increasingly be positioned to benefit as we move forward.”

Based on the strong first-quarter results Mr. Morgan said Krispy Kreme has raised operating income, exclusive of impairment charges and lease termination costs, to range from $11 million to $15 million in fiscal 2011, up from the $10 million to $13 million projected on April 15. Mr. Morgan said the company also expects the total domestic store count will increase for the first time since 2005.

“As we stated in April, we view fiscal 2011 as a period of continued investment in our business and execution of our strategic plan,” he said. “We are working diligently to further improve company operations while providing better support for our franchise partners both domestically and internationally. These efforts are critical to building a strong foundation for our business and should position us for accelerated growth in both revenues and earnings over the long term. We believe that we are only beginning to unlock the potential of the Krispy Kreme brand for our guests, customers, franchisees, team members and shareholders.”

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