Krispy Kreme Profit Misses View, Shares Plunge 14%

(RTTNews) - Krispy Kreme Doughnuts Inc. (KKD) Thursday reported a slight drop in profit for the second quarter, hurt mainly by increase in taxes, notwithstanding a ten percent revenue gain. Adjusted earnings for the quarter improved from last year, but were still short of Wall Street estimates, while revenue growth surpassed expectations.

Moving ahead, the company reaffirmed its full year 2014 earnings guidance, which is indicated to miss current estimates. Following the news, Krispy Kreme shares plunged 14 percent in after-hours trade.

Winston-Salem, North Carolina-based Krispy Kreme's second-quarter profit dropped to $4.7 million from $4.9 million last year. On a per-share basis, earnings remained flat at $0.07, due to higher number of shares outstanding.

Adjusted earnings for the quarter improved to $9.6 million or $0.14 per share from $8.2 million or $0.12 per share a year ago. On average, seven analysts polled by Thomson Reuters expected earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Chief Executive James Morgan said, "This was an outstanding quarter for us, and results exceeded our expectations, despite unusual items that in the aggregate negatively affected our earnings by about $0.01 per adjusted share. Those items, combined with a $0.02 adverse swing in gains and losses on derivative positions, penalized the year-over-year comparison by $0.03 per adjusted share."

The doughnut chain's revenue for the second quarter grew 10.4 percent to $112.7 million from $102.1 million last year. Analysts expected revenues of $111.48 million for the quarter.

The company's same store sales, or sales from stores open at least a year, for the quarter rose 10.0 percent.

Looking ahead to the fiscal 2014, the company reaffirmed its adjusted earnings guidance range of $0.59 to $0.63 per share. Analysts currently expect full-year earnings of $0.64 per share.

KKD closed Thursday's trading at $23.23, up $0.99 or 4.45%, on the NYSE. The stock, however, plunged $2.98 or 12.83%, in after hours.