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Press release from PR Newswire

Krispy Kreme Reports Financial Results For The Third Quarter Of Fiscal 2014

Monday, December 02, 2013

Krispy Kreme Reports Financial Results For The Third Quarter Of Fiscal 2014

16:02 EST Monday, December 02, 2013

WINSTON-SALEM, N.C., Dec. 2, 2013 /PRNewswire/ -- Krispy Kreme Doughnuts, Inc. (NYSE: KKD) (the "Company") today reported financial results for the third quarter of fiscal 2014, ended November 3, 2013.  The Company also raised the lower end of its adjusted EPS guidance to a new range of $0.60 to $0.63 per share from $0.59 to $0.63 for fiscal 2014, and provided preliminary guidance for fiscal 2015.

Third Quarter Fiscal 2014 Highlights Compared to the Year-Ago Period:

  • Revenues increased 6.7% to $114.2 million from $107.1 million
  • Company same store sales rose 3.7%, the twentieth consecutive quarterly increase
  • Operating income rose 27.2% to $11.7 million from $9.2 million
  • Adjusted net income rose 33.8% to $11.2 million ($0.16 per share) from $8.3 million ($0.12 per share); adjusted net income and adjusted EPS reflect income tax expense only to the extent currently payable in cash; adjusted net income and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings in the table accompanying this release)
  • Operating income and adjusted net income include a gain of $1.7 million on the sale of leasehold interests to a franchisee, which added $0.02 to adjusted EPS, and a lease termination charge of $1.5 million associated with litigation related to a lease of a former commissary facility, which reduced adjusted EPS by $0.02
  • Net income was $6.8 million ($0.09 per share) compared to $5.0 million ($0.07 per share) in the third quarter last year
  • Cash provided by operating activities was $13.5 million compared to $15.0 million in the third quarter last year

Chairman, President and Chief Executive Officer James H. Morgan commented:  "Our relentless focus on executing our long-term strategic plan is enabling us to strengthen our Company, gradually unlock our brand's full potential and create value for our shareholders.  During the third quarter, we extended our track record of positive same store sales at Company stores to 20 consecutive quarters.  We believe this is a remarkable distinction.  We are pleased to have increased our top-line at a healthy pace despite the tepid consumer spending environment.  Most importantly, we demonstrated the attractive leverage opportunities inherent within our business model as evidenced by achieving a higher rate of growth in operating income and adjusted EPS than in revenues."

Morgan continued, "Our third quarter financial performance was consistent with our expectations.  We are pleased to be raising the lower end of our expected range of adjusted EPS for fiscal 2014 to a new range of $0.60 to $0.63 from $0.59 to $0.63.  If achieved, this would represent growth of from 28% to 34% compared to last year on a 52-week basis.  Our preliminary expectation of adjusted EPS for fiscal 2015 is in the range of $0.71 to $0.76 per share."

Morgan concluded, "We are fortunate to have several means at our disposal through which to optimize returns, including deploying capital on Company store development, supporting domestic and international franchise growth, and repurchasing outstanding shares.  We believe these attributes both set us apart, and provide Krispy Kreme with a uniquely bright long-term future.  We will continue working hard every day for the benefit of our franchisees, our customers and guests, and our shareholders."

Third Quarter Fiscal 2014 Results

Consolidated Results

For the third quarter ended November 3, 2013, revenues increased 6.7% to $114.2 million from $107.1 million.

Exclusive of the $1.7 million gain on the sale of leasehold interests, direct operating expenses were $94.1 million, or 82.4% of revenues compared to 84.2% of revenues last year.  General and administrative expenses rose to $5.7 million from $5.1 million in the year-ago period, and as a percentage of total revenues increased to 5.0% from 4.7%.  Impairment and lease termination costs for the quarter include a $1.5 million provision related to litigation with the landlord at the Company's former commissary in Lorton, Virginia.

Exclusive of the $1.7 million gain from the sale of leasehold interests and the $1.5 million lease termination accrual, operating income rose 25.7% to $11.6 million from $9.2 million.

Adjusted net income was $11.2 million ($0.16 per share) compared to $8.3 million ($0.12 per share) in the third quarter last year.

Net income was $6.8 million ($0.09 per share) compared to $5.0 million ($0.07 per share), in the third quarter last year.

Segment Results

Company Stores revenues increased 3.3% to $74.9 million from $72.5 million.  Same store sales at Company stores rose 3.7%, the twentieth consecutive quarterly increase, driven principally by retail price increases.  The Company Stores segment posted operating income of $2.6 million compared to $2.0 million in the third quarter last year.

Domestic Franchise revenues rose $0.5 million to $3.0 million, with higher royalties accounting for the majority of the increase.  Total sales by domestic franchisees rose 12.7%; approximately 4.0 percentage points of the increase reflects the refranchising in fiscal 2014 of a total of six stores in Kansas, Missouri and Texas.  Same store sales at Domestic Franchise shops increased 10.7%.  Exclusive of the $1.7 million gain from the sale of leasehold interests, Domestic Franchise segment operating income improved to $1.5 million from $1.2 million in the third quarter last year.

International Franchise revenues increased 3.0% to $6.2 million from $6.0 million, driven by higher royalties.  Sales by international franchise stores rose 4.1%.  Changes in the rates of exchange between the U.S. dollar and the foreign currencies in which the Company's international franchisees do business decreased sales by international franchisees measured in U.S. dollars by approximately $5.8 million in the third quarter of fiscal 2014 compared to last year, which adversely affected international royalty revenues by approximately $350,000.  Excluding the effects of exchange rate changes, sales by international franchisees rose 9.8%.  Adjusted to eliminate the effects of changes in foreign exchange rates, same store sales at international franchise stores fell 3.1%, reflecting, among other things, honeymoon effects from the substantial number of international store openings in recent years, as well as cannibalization as markets develop.  The International Franchise segment generated operating income of $4.4 million compared to $4.3 million in the third quarter last year, reflecting the deployment of increased resources to support current and anticipated future international growth.

KK Supply Chain revenues (including sales to Company stores) rose 10.4% to $58.3 million from $52.8 million in the same period last year, driven principally by higher unit volumes of doughnut mixes and other ingredients compared to last year.  External KK Supply Chain revenues rose 15.5% to $30.1 million from $26.1 million in the year-ago period.  KK Supply Chain generated operating income of $9.1 million in the third quarter of fiscal 2014, up from $7.3 million in the third quarter last year.

Outlook

Based on third quarter and fiscal year-to-date results and other current information, management is raising the low end of its expected adjusted EPS range for the year by $0.01 per share and leaving the high end of the range unchanged.  The new range of from $0.60 to $0.63 per share, if achieved, would represent a year-over-year increase in adjusted EPS of between 28% and 34% from the $0.47 per share reported on a 52-week basis for fiscal 2013.

For fiscal 2015, the Company anticipates opening 10 to 15 Company stores, 20 to 25 domestic franchise stores, and about 85 international franchise stores.  Although the Company looks for continued organic same store sales growth in its domestic stores, international franchise same store sales will likely continue to be negative due to the substantial growth in international markets in recent years.

Based on these factors, the Company's preliminary fiscal 2015 guidance is for adjusted EPS of between $0.71 and $0.76 per share.  The foregoing adjusted EPS range reflects estimated adjusted income tax expense of $3 million; adjusted income tax expense consists solely of taxes currently payable in cash.  Because the Company has substantial net operating loss carryovers, the amount of taxes payable in cash is expected to remain insignificant for the foreseeable future.

Adjusted net income, adjusted income tax expense and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings in the table accompanying this release).

Conference Call

The Company will host a conference call to review financial results for the third quarter of fiscal 2014 as well as its outlook this afternoon at 4:30 p.m. (ET).

A live webcast of the conference call will be available at www.krispykreme.com.   The conference call also can be accessed over the phone by dialing (877) 312-5514 or, for international callers, by dialing (970) 315-0452.  An archived replay of the call will be available shortly after its conclusion by dialing (855) 859-2056, or (404) 537-3406 for international callers; the passcode is 10360752.  The audio replay will be available through December 9, 2013.  A transcript of the conference call also will be available on the Company website.

About Krispy Kreme

Krispy Kreme is a leading branded specialty retailer and wholesaler of premium quality sweet treats and complementary products, including its signature Original Glazed® doughnut.  Headquartered in Winston-Salem, NC, the Company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937.  Today, Krispy Kreme shops can be found in over 810 locations in 23 countries around the world.  Connect with Krispy Kreme at www.krispykreme.com and on Facebook, Foursquare, Twitter and YouTube.

Information contained in this press release, other than historical information, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are based on management's beliefs, assumptions and expectations of our future economic performance, considering the information currently available to management.  These statements are not statements of historical fact.  Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements.  The words "believe," "may," "forecast," "could," "will," "should," "would," "anticipate," "estimate," "expect," "intend," "objective," "seek," "strive" or similar words, or the negative of these words, identify forward-looking statements.  Factors that could contribute to these differences include, but are not limited to:  the quality of Company and franchise store operations; our ability, and our dependence on the ability of our franchisees, to execute on our and their business plans; our relationships with our franchisees; our ability to implement our international growth strategy; our ability to implement our domestic small shop operating model; political, economic, currency and other risks associated with our international operations; the price and availability of raw materials needed to produce doughnut mixes and other ingredients, and the price of motor fuel; our relationships with wholesale customers; our ability to protect our trademarks and trade secrets; changes in customer preferences and perceptions; risks associated with competition; risks related to the food service industry, including food safety and protection of personal information; compliance with government regulations relating to food products and franchising; increased costs or other effects of new government regulations relating to healthcare benefits; and risks associated with implementation of new technology platforms.  These and other risks and uncertainties, which are described in more detail in the Company's most recent Annual Report on Form 10-K and other reports and statements filed with the United States Securities and Exchange Commission, are difficult to predict, involve uncertainties that may materially affect actual results and may be beyond the Company's control, and could cause actual results, performance or achievements to be materially different from those expressed or implied by any of these forward-looking statements.  New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company.  Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

 

KRISPY KREME DOUGHNUTS, INC

CONSOLIDATED STATEMENT OF INCOME

Three Months Ended

Nine Months Ended

November 3,

October 28,

November 3,

October 28,

2013

2012

2013

2012

(In thousands, except per share amounts)

Revenues

$

114,231

$

107,087

$

347,585

$

317,698

Operating expenses:

Direct operating expenses (exclusive of depreciation and

amortization expense shown below)

92,466

90,220

282,830

264,568

General and administrative expenses 

5,730

5,083

17,440

16,311

Depreciation and amortization expense 

2,788

2,357

8,272

7,238

Impairment charges and lease termination costs 

1,531

216

1,543

302

Operating income 

11,716

9,211

37,500

29,279

Interest income 

341

14

472

102

Interest expense 

(131)

(384)

(922)

(1,202)

Loss on refinancing of debt

-

-

(967)

-

Equity in losses of equity method franchisees 

(61)

(47)

(174)

(150)

Other non-operating income, net 

29

80

23

237

Income before income taxes 

11,894

8,874

35,932

28,266

Provision for income taxes 

5,114

3,830

16,436

12,267

Net income

$

6,780

$

5,044

$

19,496

$

15,999

Earnings per common share:

Basic 

$

0.10

$

0.08

$

0.29

$

0.24

Diluted  

$

0.09

$

0.07

$

0.27

$

0.23

Weighted average shares outstanding:

Basic 

67,543

66,668

67,274

67,897

Diluted  

71,506

68,803

71,058

70,041

 

KRISPY KREME DOUGHNUTS, INC

CONSOLIDATED BALANCE SHEET

November 3,

February 3,

2013

2013

(In thousands)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents 

$

66,745

$

66,332

Receivables 

28,111

25,627

Receivables from equity method franchisees 

683

705

Inventories 

14,818

12,358

Deferred income taxes

23,067

23,323

Other current assets 

6,349

6,439

Total current assets 

139,773

134,784

Property and equipment 

87,678

78,024

Investments in equity method franchisees 

-

-

Goodwill and other intangible assets 

24,112

24,195

Deferred income taxes

78,693

93,088

Other assets 

11,940

11,847

Total assets 

$

342,196

$

341,938

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Current maturities of long-term debt 

$

365

$

2,148

Accounts payable 

14,427

12,198

Accrued liabilities 

29,781

32,330

Total current liabilities 

44,573

46,676

Long-term debt, less current maturities 

1,632

23,595

Other long-term obligations and deferred credits

27,063

25,235

Commitments and contingencies

SHAREHOLDERS' EQUITY:

Preferred stock, no par value 

-

-

Common stock, no par value 

356,730

354,068

Accumulated other comprehensive loss 

-

(338)

Accumulated deficit 

(87,802)

(107,298)

Total shareholders' equity 

268,928

246,432

Total liabilities and shareholders' equity

$

342,196

$

341,938

 

KRISPY KREME DOUGHNUTS, INC

CONSOLIDATED STATEMENT OF CASH FLOWS

Nine Months Ended

November 3,

October 28,

2013

2012

(In thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

19,496

$

15,999

Adjustments to reconcile net income to net cash provided by operating activities:

   Depreciation and amortization expense

8,272

7,238

   Deferred income taxes

14,438

10,824

   Accrued rent expense

578

369

   Loss on refinancing of debt

967

-

   (Gain) loss on disposal of property and equipment

(1,930)

468

   (Gain) on refranchising

(876)

-

   Share-based compensation

3,160

3,570

   Provision for doubtful accounts

(82)

65

   Amortization of deferred financing costs

258

300

   Equity in losses of equity method franchisees

174

150

   Other

(109)

(1,075)

Change in assets and liabilities:

   Receivables

(2,523)

(1,950)

   Inventories

(2,621)

314

   Other current and non-current assets

1,393

(1,499)

   Accounts payable and accrued liabilities

(947)

690

   Other long-term obligations and deferred credits

1,363

2,515

      Net cash provided by operating activities 

41,011

37,978

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(18,089)

(9,480)

Proceeds from disposals of property and equipment

1,681

66

Proceeds from refranchising

681

-

Acquisition of stores from franchisee

-

(915)

Other investing activities

305

347

      Net cash used for investing activities

(15,422)

(9,982)

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of long-term debt

(24,546)

(1,652)

Deferred financing costs

(132)

(11)

Proceeds from exercise of stock options

2,155

-

Proceeds from exercise of warrants

-

9

Repurchase of common shares

(2,653)

(20,758)

      Net cash used for financing activities

(25,176)

(22,412)

Net increase in cash and cash equivalents

413

5,584

Cash and cash equivalents at beginning of period

66,332

44,319

Cash and cash equivalents at end of period

$

66,745

$

49,903

 

KRISPY KREME DOUGHNUTS, INC.

NON-GAAP FINANCIAL INFORMATION

As of February 3, 2013, the Company had net deferred income tax assets of approximately $116 million, of which approximately $76 million related to federal and state net operating loss carryovers.  The Company's federal net operating loss carryovers totaled approximately $206 million.

The Company has reported cumulative pretax income of over $100 million since the beginning of fiscal 2010, and the Company also has generated significant taxable income during this period.  However, because of the Company's utilization of its federal and state net operating loss carryovers and other deferred tax assets, the Company's cash payments for income taxes have been relatively insignificant during this period.  As a result, the provision for income tax expense has substantially exceeded cash payments for income taxes.  Until such time as the Company's net operating loss carryovers are exhausted or expire, GAAP income tax expense is expected to continue to substantially exceed the amount of cash income taxes payable by the Company.

The Company's fiscal year ends on the Sunday closest to January 31, which periodically results in a 53-week year.  Fiscal 2013 contained 53 weeks, while fiscal 2014 will contain 52 weeks.

In the second quarter of fiscal 2014, the Company recorded a charge of $1.0 million related to the refinancing of its secured credit facilities, consisting principally of the writeoff of deferred financing costs related to the Company's term loan, which was retired in full, and the termination of an interest rate hedge related to the term loan.  Charges of this nature are not expected to recur on a regular basis.

The following non-GAAP financial information and related reconciliation to GAAP measures are provided to assist the reader in understanding the effects of the above facts and transactions on the Company's results of operations.  In addition, the non-GAAP financial information is intended to illustrate the material difference between the Company's income tax expense and income taxes currently payable.  These non-GAAP performance measures are consistent with other measurements made by management in the operation of the business which do not consider income taxes except to the extent to which those taxes currently are payable, for example, capital allocation decisions and incentive compensation measurements that are made on a pretax basis.

 

Historical Periods

Three Months Ended

Nine Months Ended

Year Ended

November 3,

October 28,

November 3,

October 28,

February 3,

2013

2012

2013

2012

2013

(In thousands, except per share amounts)

Net income, as reported

$

6,780

$

5,044

$

19,496

$

15,999

$

20,779

Loss on refinancing of debt

-

-

967

-

-

Provision for deferred income taxes

4,388

3,300

14,438

10,824

13,413

Adjusted net income

11,168

8,344

34,901

26,823

34,192

Earnings for the 53rd week

-

-

-

-

(1,273)

Adjusted net income - 52 week basis

$

11,168

$

8,344

$

34,901

$

26,823

$

32,919

Adjusted earnings per common share:

   Basic

$

0.17

$

0.13

$

0.52

$

0.40

$

0.51

   Diluted

$

0.16

$

0.12

$

0.49

$

0.38

$

0.49

Adjusted earnings per common share - 52 week basis:

   Basic

$

0.17

$

0.13

$

0.52

$

0.40

$

0.49

   Diluted

$

0.16

$

0.12

$

0.49

$

0.38

$

0.47

Weighted average shares outstanding:

   Basic

67,543

66,668

67,274

67,897

67,624

   Diluted

71,506

68,803

71,058

70,041

69,896

 

Management's Earnings Guidance

Year Ending

February 1, 2015

February 2, 2014

From

To

From

To

(In thousands, except per share amounts)

Net income, as reported

$

31,300

$

33,600

$

24,500

$

25,800

Loss on refinancing of debt

-

-

1,000

1,000

Provision for deferred income taxes

19,700

21,400

17,100

18,200

Adjusted net income

$

51,000

$

55,000

$

42,600

$

45,000

Adjusted earnings per common share:

   Basic

$

0.75

$

0.81

$

0.63

$

0.67

   Diluted

$

0.71

$

0.76

$

0.60

$

0.63

Weighted average shares outstanding:

   Basic

68,000

68,000

67,300

67,300

   Diluted

72,000

72,000

71,200

71,200

 

KRISPY KREME DOUGHNUTS, INC

SEGMENT INFORMATION

Three Months Ended

Nine Months Ended

November 3,

October 28,

November 3,

October 28,

2013

2012

2013

2012

(In thousands)

Revenues:

Company Stores: 

On-premises sales:

Retail sales

$

32,733

$

31,039

$

102,331

$

90,697

Fundraising sales

4,473

4,260

11,809

11,791

Total on-premises sales

37,206

35,299

114,140

102,488

Wholesale sales

37,680

37,194

118,356

112,684

 Company Stores revenues 

74,886

72,493

232,496

215,172

Domestic Franchise 

3,026

2,498

8,696

7,561

International Franchise 

6,205

6,024

18,707

17,832

KK Supply Chain:

Total revenues 

58,304

52,825

175,316

158,075

Less ? intersegment sales elimination 

(28,190)

(26,753)

(87,630)

(80,942)

 External KK Supply Chain revenues 

30,114

26,072

87,686

77,133

Total revenues 

$

114,231

$

107,087

$

347,585

$

317,698

Operating income:

Company Stores 

$

2,599

$

1,985

$

9,703

$

5,271

Domestic Franchise 

3,156

1,174

6,121

4,072

International Franchise 

4,449

4,301

13,219

12,957

KK Supply Chain 

9,098

7,312

28,336

24,181

Total segment operating income 

19,302

14,772

57,379

46,481

Unallocated general and administrative expenses 

(5,730)

(5,083)

(17,440)

(16,311)

Corporate depreciation and amortization expense

(325)

(262)

(896)

(589)

Impairment charges and lease termination costs 

(1,531)

(216)

(1,543)

(302)

Consolidated operating income 

$

11,716

$

9,211

$

37,500

$

29,279

Depreciation and amortization expense:

Company Stores 

$

2,255

$

1,880

$

6,783

$

5,921

Domestic Franchise 

36

40

72

150

International Franchise 

2

3

6

9

KK Supply Chain 

170

172

515

569

Corporate administration 

325

262

896

589

Total depreciation and amortization expense 

$

2,788

$

2,357

$

8,272

$

7,238

 

KRISPY KREME DOUGHNUTS, INC

SELECTED OPERATING STATISTICS

Three Months Ended

Nine Months Ended

November 3,

October 28,

November 3,

October 28,

2013

2012

2013

2012

Systemwide Sales (in thousands):(1)

   Company stores 

$

74,227

$

71,884

$

230,241

$

213,399

   Domestic Franchise stores 

77,725

68,950

237,327

210,454

   International Franchise stores 

107,827

103,536

321,053

310,893

   International Franchise stores, in constant dollars(2)

107,827

98,221

321,053

297,643

Change in Same Store Sales (on-premises sales only):(3)

   Company stores

3.7

%

6.8

%

8.4

%

4.7

%

   Domestic Franchise stores 

10.7

%

5.0

%

11.2

%

5.8

%

   International Franchise stores 

(8.7)

%

(8.3)

%

(10.9)

%

(9.6)

%

   International Franchise stores, in constant dollars(2)

(3.1)

%

(7.7)

%

(6.4)

%

(8.4)

%

Company Stores - Change in Same Store Sales:

   Retail pricing

3.3

%

0.0

%

3.3

%

0.9

%

   Guest check average (exclusive of pricing)

(1.4)

(0.3)

(0.8)

(0.8)

   Customer count

1.1

7.1

5.6

4.6

   Other

0.7

0.0

0.3

0.0

      Total

3.7

%

6.8

%

8.4

%

4.7

%

Change in Same Store Customer Count - Company stores

   (retail sales only)

1.3

%

8.4

%

6.5

%

5.3

%

Average guest check - Company stores (retail sales only)

$

7.59

$

7.43

$

7.52

$

7.33

Company stores - store operating weeks

1,210

1,232

3,649

3,631

Wholesale Metrics - Company stores:(4)

   Grocers/mass merchants: 

      Change in average weekly number of doors

(8.8)

%

(2.9)

%

(6.1)

%

(4.1)

%

      Change in average weekly sales per door

10.0

%

6.9

%

12.0

%

7.8

%

   Convenience stores: 

      Change in average weekly number of doors

0.8

%

(4.5)

%

(0.4)

%

(7.7)

%

      Change in average weekly sales per door

3.6

%

4.7

%

5.7

%

9.3

%

 

1)

Systemwide sales, a non-GAAP financial measure, include the sales by both Company and franchise stores but excludes sales among Company and franchise stores.  The Company believes systemwide sales data are useful in assessing the overall performance of the Krispy Kreme brand and, ultimately, the performance of the Company.  The Company's consolidated financial statements appearing elsewhere herein include sales by Company stores, sales to franchisees by the KK Supply Chain business segment, and royalties and fees received from franchise stores based on their sales, but exclude sales by franchise stores to their customers.

2)

Computed on a pro forma basis assuming the average rate of exchange between the U.S. dollar and each of the foreign currencies in which the Company's international franchisees conduct business had been the same in the comparable prior year period. 

3)

The change in "same store sales" represents the aggregate on-premises sales (including fundraising sales) during the current year period for all stores which had been open for more than 56 consecutive weeks during the current year period (but only to the extent such sales occurred in the 57th or later week of each store's operation) divided by the aggregate on-premises sales of such stores for the comparable weeks in the preceding year period.  Once a store has been open for at least 57 consecutive weeks, its sales are included in the computation of same stores sales for all subsequent periods.  In the event a store is closed temporarily (for example, for remodeling) and has no sales during one or more weeks, such store's sales for the comparable weeks during the earlier or subsequent period are excluded from the same store sales computation.  The change in "same store customer count" is similarly computed, but is based upon the number of retail transactions reported in the Company's point-of-sale system.

4)

For Company wholesale sales, "average weekly number of doors" represents the average number of customer locations to which product deliveries are made during a week by Company Stores, and "average weekly sales per door" represents the average weekly sales to each such location by Company Stores.

 

KRISPY KREME DOUGHNUTS, INC

STORE COUNT

Number of Company Stores

Factory

Stores

Hot Shops

Fresh Shops

Total

Three months ended November 3, 2013

August 4, 2013

72

20

1

93

Opened 

2

-

-

2

Closed 

-

(1)

-

(1)

Change in store type

1

(1)

-

-

November 3, 2013

75

18

1

94

Nine months ended November 3, 2013

February 3, 2013

76

20

1

97

Opened 

5

-

-

5

Closed 

(1)

(1)

-

(2)

Change in store type

1

(1)

-

-

Transferred to Domestic Franchise

(6)

-

-

(6)

November 3, 2013

75

18

1

94

Three months ended October 28, 2012

July 29, 2012

73

19

1

93

Opened 

1

-

-

1

Closed 

-

-

-

-

Transferred from Domestic Franchise

1

1

-

2

October 28, 2012

75

20

1

96

Nine months ended October 28, 2012

January 29, 2012

72

19

1

92

Opened 

2

-

-

2

Closed 

-

-

-

-

Transferred from Domestic Franchise

1

1

-

2

October 28, 2012

75

20

1

96

 

KRISPY KREME DOUGHNUTS, INC

STORE COUNT

Number of Domestic Franchise Stores

Factory

Stores

Hot Shops

Fresh Shops

Total

Three months ended November 3, 2013

August 4, 2013

105

31

14

150

Opened 

1

4

-

5

Closed 

-

-

-

-

November 3, 2013

106

35

14

155

Nine months ended November 3, 2013

February 3, 2013

99

29

14

142

Opened 

1

6

-

7

Closed 

-

-

-

-

Transferred from Company Stores

6

-

-

6

November 3, 2013

106

35

14

155

Three months ended October 28, 2012

July 29, 2012

101

26

14

141

Opened 

1

2

-

3

Closed 

-

-

-

-

Transferred to Company stores

(1)

(1)

-

(2)

October 28, 2012

101

27

14

142

Nine months ended October 28, 2012

January 29, 2012

102

25

15

142

Opened 

2

4

-

6

Closed 

(2)

(1)

(1)

(4)

Transferred to Company stores

(1)

(1)

-

(2)

October 28, 2012

101

27

14

142

 

KRISPY KREME DOUGHNUTS, INC

STORE COUNT

Number of International Franchise Stores

Factory

Stores

Hot Shops

Fresh Shops

Kiosks

Total

Three months ended November 3, 2013

August 4, 2013

119

9

280

138

546

Opened 

5

-

11

8

24

Closed 

(1)

-

(5)

(1)

(7)

Change in store type

-

-

1

(1)

-

November 3, 2013

123

9

287

144

563

Nine months ended November 3, 2013

February 3, 2013

120

9

257

123

509

Opened 

9

-

38

23

70

Closed 

(5)

-

(10)

(1)

(16)

Change in store type

(1)

-

2

(1)

-

November 3, 2013

123

9

287

144

563

Three months ended October 28, 2012

July 29, 2012

118

11

234

114

477

Opened 

3

-

18

5

26

Closed 

(2)

-

(3)

(5)

(10)

October 28, 2012

119

11

249

114

493

Nine months ended October 28, 2012

January 29, 2012

118

11

226

105

460

Opened 

7

-

46

17

70

Closed 

(5)

-

(17)

(15)

(37)

Change in store type

(1)

-

(6)

7

-

October 28, 2012

119

11

249

114

493

 

SOURCE Krispy Kreme Doughnut Corporation

For further information: Krispy Kreme: Media: Lafeea Watson, (336) 726-8878, lwatson@krispykreme.com, Investor Relations: Anita K. Booe, (336) 703-6902, abooe@krispykreme.com

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