Krispy Kreme, Inc. (NASDAQ:DNUT) shares climbed sharply in premarket trading Thursday after the doughnut maker delivered stronger-than-expected fourth-quarter results and pointed to continued progress in its business turnaround strategy.
The stock rose 14.72% before the opening bell as investors reacted positively to improved profitability and balance sheet strengthening despite a modest decline in revenue.
Earnings top expectations as margins improve
Krispy Kreme reported adjusted earnings per share of $0.09 for the quarter, well ahead of analyst forecasts of $0.03. Revenue totaled $392.4 million, slightly above consensus estimates of $389.47 million but down 2.9% from $404.0 million recorded in the same period last year.
The revenue decrease primarily reflected the company’s decision to close underperforming outlets as part of its restructuring efforts. Global Points of Access fell 13.5% year over year to 15,194 locations.
Even so, profitability improved meaningfully. Adjusted EBITDA margin expanded by 280 basis points to 14.2%, while adjusted EBITDA increased 21.0% year over year to $55.6 million.
The gains were supported by operational efficiency measures, reductions in selling, general and administrative expenses, the removal of costs tied to the discontinued McDonald’s USA partnership, and $4.8 million in insurance recoveries related to a cybersecurity incident in 2024.
Turnaround strategy gaining traction
“During the fourth quarter, we demonstrated meaningful progress on our turnaround, unlocking strong consumer demand for Krispy Kreme’s iconic, fresh doughnuts through our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth,” said CEO Josh Charlesworth.
Growth outlook and balance sheet improvements
Looking ahead, Krispy Kreme expects systemwide sales to grow between 2% and 4% in constant currency during fiscal 2026, compared with $1.96 billion in 2025. Growth at the midpoint would bring sales to roughly $2.02 billion.
The company plans to open at least 100 new stores globally while targeting capital expenditures of $50 million to $60 million. Management also expects positive free cash flow and aims to reduce its net leverage ratio to 5.5x or lower.
Net leverage improved to 6.7x as of Dec. 28, 2025, down from 7.3x in the previous quarter, reflecting ongoing balance sheet repair.
Separately, Krispy Kreme announced in December that Unison Capital, Inc. agreed to acquire its Japan operations for approximately $65 million, with the transaction expected to close in the first quarter of 2026.