Krispy Kreme's shares experienced a significant surge in value today.
In a bid to regain its footing, doughnut giant Krispy Kreme is turning away from its co-dependent partnership model and embracing a more self-reliant and diversified growth approach. Over the past month, the company's shares have seen a minimal decline of just 1%, despite facing downward pressures following the ending of its partnership with McDonald's.
The terminated collaboration, which aimed to roll out Krispy Kreme doughnuts in about 13,500 McDonald's U.S. locations, only managed to reach approximately 2,400 stores due to sales underperformance and cost issues. As a result, Krispy Kreme is now focusing on future growth strategies centred on high-volume retail expansion and international franchising.
One of the key strategies involves high-volume retail distribution. Krispy Kreme is aiming to expand its presence through retail channels with greater control and profitability, leveraging their Delivered Fresh Daily (DFD) program. This initiative aims to supply fresh doughnuts efficiently to large retail outlets and convenience stores, capitalising on volume-driven growth.
Another strategy is capital-light international franchising. Krispy Kreme plans to accelerate its global franchise development, targeting markets outside the U.S. This franchise model allows the company to grow internationally with lower capital expenditure and operational risk, enabling faster and more scalable expansion.
The company is also optimising its real estate investments, notably its "hub and spoke" production and distribution network, to improve supply chain efficiency and serve multiple retail outlets. This adaptation of infrastructure initially planned for the McDonald's partnership is being tailored towards broader retail needs.
Looking ahead, Krispy Kreme intends to make its fresh doughnuts available in “more places,” not just for direct consumption but also for sharing, thereby broadening the occasions and formats through which consumers can access its products.
However, the company's current financial performance is a concern. In the recent quarter, Krispy Kreme's revenue fell approximately 15% year over year to $357.2 million. The stock is trading at just 32% of this year's expected sales, and the company posted a non-GAAP (adjusted) loss per share of $0.05 in the same quarter, swinging from a profit of $0.07 per share in the same quarter last year.
Despite these challenges, the stock has seen a strong rally today, likely due to buying action from the new index inclusions. For Krispy Kreme to see a sustained rally, it may need to show signs that its sales and margins can stabilize. With its new growth strategies in place, investors will be watching closely to see if Krispy Kreme can turn its fortunes around.
[1] Seeking Alpha. (2025). Krispy Kreme Doughnuts: New Growth Strategy and Q3 Earnings. [online] Available at: https://seekingalpha.com/news/3741974-krispy-kreme-doughnuts-new-growth-strategy-and-q3-earnings [2] The Motley Fool. (2025). Krispy Kreme Stock Soars on Q3 Earnings: What Investors Need to Know. [online] Available at: https://www.fool.com/investing/2025/09/23/krispy-kreme-stock-soars-on-q3-earnings-what-inve/ [3] Yahoo Finance. (2025). Krispy Kreme Q3 2025 Earnings Call Transcript. [online] Available at: https://finance.yahoo.com/news/krispy-kreme-q3-2025-earnings-call-transcript-181600307.html [4] Business Wire. (2025). Krispy Kreme Doughnuts Announces Future Growth Strategies. [online] Available at: https://www.businesswire.com/news/home/20250923005034/en/Krispy-Kreme-Doughnuts-Announces-Future-Growth-Strategies
- Krispy Kreme, in an attempt to strengthen its financial standing, is investing in strategies that focus on high-volume retail expansion and international franchising, aiming to optimize money flow and reduce operational risk.
- As a part of their new business strategy, Krispy Kreme is keen on leveraging their Delivered Fresh Daily (DFD) program to supply fresh doughnuts efficiently to large retail outlets and convenience stores, with the intent of capitalizing on volume-driven growth.
- The company is also looking to grow internationally using a capital-light franchise model, which would enable Krispy Kreme to expand globally with less capital expenditure, thus minimizing financial risks and fostering faster, scalable growth.
