Krispy Kreme Earnings Preview: Will The Company Disappoint Investors?

Krispy Kreme Doughnuts KKD is scheduled to report its first quarter (fiscal 2016) financial results on Wednesday after the market closes. According to Estimize, it is expected to deliver an 8.6 percent year-over-year decline in earnings.

Krispy Kreme’s earnings are quite cyclical, in the sense that they tend to peak in the first quarter each year, fall in the second, recuperate in the third, fall in the fourth, and, again surge in the following first quarter.

While this quarter’s earnings are expected to come in above last quarter’s, they are projected below the ones reported in the same quarter last year.

For the first quarter of fiscal 2015, the company registered earnings of $0.23 per share on revenue of $121.6 million. For the latest quarter, earnings came in at $0.17 per share, and revenue at $125.37 million.

For the current quarter, the Street models consensus earnings of $0.21 per share on revenue of $136.03 million, while the crowd projects consensus earnings of $0.21 per share on revenue of $134.96 million.

It should also be noted that the company has a history of falling short of estimates.

Analyst Comments

After the company’s last earnings report, Roth Capital's Anton Brenner said the results were a matter of "one-time headwinds" and thus reiterated a Buy rating and $27 target on the company.

Going forward, the analyst sees “widening profit margins and sustained, double-digit expansion of company and franchised stores.”

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