Krispy Kreme, Inc. (NASDAQ:DNUT) reported fiscal first-quarter 2026 results on Thursday that came in below analyst expectations on both earnings and revenue, although shares gained 5.4% as investors focused on operational improvements and progress in the company’s turnaround strategy.
The doughnut chain posted an adjusted loss of -$0.05 per share for the quarter ended March 29, missing the analyst consensus estimate of -$0.03 by $0.02.
Revenue declines following strategic store closures
Quarterly revenue totaled $367.0 million, down 2.2% from the prior-year period and below analyst expectations of $372.41 million.
Revenue in the same quarter last year was $375.2 million.
Krispy Kreme said the decline primarily reflected strategic closures of underperforming locations completed during the third quarter of 2025, including roughly 2,400 points of distribution tied to the ended McDonald’s USA partnership.
Profitability metrics improve sharply
Despite weaker revenue, the company reported notable improvements in profitability.
Adjusted EBITDA increased 38.0% year-over-year to $33.1 million.
Adjusted EBITDA margin expanded by 260 basis points to 9.0%.
Krispy Kreme also generated positive free cash flow of $11.4 million during the quarter, representing an improvement of $58.1 million compared with the prior year.
The company reduced its net leverage ratio to 5.5x from 6.7x in the fourth quarter.
CEO highlights progress in turnaround strategy
“The first quarter highlighted significant progress across every pillar of our turnaround plan. We reduced net leverage, increased adjusted EBITDA margin by 260 basis points, and delivered positive free cash flow,” said CEO Josh Charlesworth.
Full-year revenue outlook trails analyst expectations
For fiscal 2026, Krispy Kreme projected revenue between $1.25 billion and $1.35 billion.
The midpoint of $1.30 billion came in well below the analyst consensus estimate of $1.46 billion.
The company also forecast adjusted EBITDA in a range of $140 million to $150 million.
In addition, Krispy Kreme expects systemwide sales growth of 2% to 4% year-over-year on a constant-currency basis.
More about Krispy Kreme
Krispy Kreme is a global doughnut and coffee retailer known for its Original Glazed doughnuts and branded retail locations. The company distributes products through shops, retail partnerships, e-commerce, and delivery channels across multiple international markets.