Krispy Kreme's Q2 Highlights: Earnings Miss, Economic Pressures, Updated Outlook & More

Krispy Kreme Inc DNUT reported second-quarter FY22 sales growth of 7.5% year-on-year to $375.25 million, missing the consensus of $385.32 million.
Organic revenue growth of 8.9% was driven by strong performances in Hubs with Spokes, both domestically and internationally.
Revenue in the U.S. and Canada segment climbed 8.5% Y/Y to $250.5 million, the International segment grew 5.2% to $93.9 million, and Market Development increased 6.5% to $30.9 million.
E-commerce constituted 17.5% of retail sales.
The operating margin contracted 60 basis points Y/Y to 2.0%, and operating income for the quarter fell 17.7% to $7.5 million.
The adjusted EBITDA decreased 9.6% Y/Y to $47.4 million, and the EBITDA margin contracted 240 basis points to 12.6%.
Adjusted EPS of $0.08 missed the consensus of $0.09.
The company held $26.2 million in cash and equivalents as of July 3, 2022.
Outlook: Krispy Kreme sees FY22 sales of $1.49 billion – $1.52 billion (prior view $1.53 billion - $1.56 billion), against the consensus of $1.56 billion.
The company expects FY22 adjusted EPS of $0.29 - $0.32 (previous view $0.38 - $0.41) versus the Street view of $0.41.
Krispy Kreme sees organic revenue growth of 10% - 12% (unchanged) and Adjusted EBITDA of $189 million - $195 million (prior view $210 million - $218 million).
The company said its updated guidance reflects the current soft consumer environment and heat waves this summer in the U.K.
Price Action: DNUT shares are trading lower by 11.64% at $12.83 on the last check Wednesday.
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