Krispy Kreme plunges 25% as donut giant ditches its dividend, hits pause on McDonald’s collab
The popular donut chain is tightening its belt to focus on debt and long-term growth.
Krispy Kreme shares plunged nearly 25% in premarket trading Thursday after the company scrapped its quarterly dividend and hit pause on its McDonald’s partnership.
The decision is aimed at paying down the company’s stacked debt and fueling long-term growth. As of March, Krispy Kreme had expanded to over 2,400 McDonald’s locations, but it said it will now direct resources to other retail partnerships, including ones with Walmart and Costco.
The move comes along with mixed first-quarter results. Krispy Kreme posted a net loss of $0.05 per share, matching the Street’s expectations. Revenue landed at $375.2 million, in line with company guidance but shy of Wall Street’s $384.4 million target.
Looking ahead, the company expects second-quarter net revenue between $370 million and $385 million, below analysts’ estimates of $393 million.
Before this morning’s premarket drop, Krispy Kreme shares were down more than 66% over the past year.