Krispy Kreme, Inc.

Key Points
Krispy Kreme's U.S. fresh delivery model is profitable and expanding, but the company is still losing money.
The company's interest expenses and 0.36 current ratio make its current business model unsustainable, which is why it's aggressively deleveraging.
While a deleveraged balance sheet could eventually allow it to regain profitability, it could take years of falling revenues before it can achieve that goal.
Krispy Kreme (NASDAQ: DNUT) has firmly established itself as a meme stock. It's down by 54% this year, but has also surged by almost 70% from the bottom of the trough it sank into this summer. In its Q3 earnings press release, CEO Josh Charlesworth highlighted two initiatives that could help the company return to profitability and revenue growth after skidding in recent years.
Net income has been negative for a while, and in the few quarters Krispy Kreme has been profitable over the past five years, its margins have been razor-thin.
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Two big opportunities
Charlesworth said that profitable U.S. expansion and capital-light international franchise growth are the two levers that will bring the company back to profitability. However, it still looks like it faces an uphill battle. Revenue dropped by 1.2% year over year in Q3. But its $7.2 million operating loss was narrower than its $16 million operating loss in the prior-year period.
Krispy Kreme is still shrinking, based on its 6.1% year-over-year decline in global points of access. It also ended its unprofitable partnership with McDonald's. These are smart moves to deleverage the balance sheet, but it's hard to grow sales while removing locations.
Krispy Kreme is focusing on profitable growth, so if its revenue dropped considerably, but its net margins turned positive again, that would be a big win, and a base the company could build on. It has lightly tapped into international markets and is working with local franchisee operators to scale up in a capital-light way.
Charlesworth also said that Krispy Kreme's U.S. fresh delivery model is profitable and expanding, but the company didn't provide specific numbers for that segment. The food delivery space has been hot. If Krispy Kreme can continue to capitalize on it, its margins may flip to positive.
The balance sheet must be deleveraged
Krispy Kreme's balance sheet is a disaster that can't be sustained. That's why closing many locations is necessary, though it will come at the cost of revenue growth. The doughnut maker must shrink before it can grow again, and that transition may take multiple years to complete.
Interest expenses are another issue for the company. Its Q3 operating loss of $7.2 million was bad enough, but that doesn't include the $16.4 million it spent on interest. That was nearly identical to the amount of interest it paid in Q3 2024.
It also has $161.8 million in total current assets against $448.9 million in total current liabilities, resulting in a low 0.36 current ratio. The median current ratio for the retail industry is 1.3. Krispy Kreme's low ratio shows that it won't be able to keep up with current obligations unless it continues to deleverage its balance sheet.
It has a 0.5 price-to-sales ratio, and a P/S ratio in the 1 to 2 range is generally viewed as fairly valued. A lower ratio implies a better value, but investors shouldn't expect Krispy Kreme's ratio to rise to 1 anytime soon. The only path to solving its profitability issues involves a prolonged period of revenue declines and deleveraging. Once profitability is achieved and the business rebounds, the stock could potentially warrant a multiple expansion. But the second-half rally in Krispy Kreme stock has been more driven by meme trading and momentum than fundamentals.
Should you buy stock in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can Krispy Kreme Preserve Its Meme-Stock Rally in 2026?

Key Points
Kohl's has outperformed the S&P 500 this year, but is still woefully behind over the past five years.
A low quick ratio puts a lot of pressure on declining inventory sales to cover current liabilities.
Interest eats up all of Kohl's operating income, so it's no surprise the retailer had to significantly cut its dividend.
Kohl's (NYSE: KSS) stock surprised the naysayers with a 64% surge this year, but its five-year chart shows what more people would expect from a declining clothing retail stock. Its 42% drop during that time doesn't come close to the S&P 500's (SNPINDEX: ^GSPC) 83% gain over the same time frame, but the index is only up by 16% this year.
The company offers a 2.18% yield at current levels, but narrow profit margins limit future dividend growth. It's also not a good sign that Kohl's cut its dividend by 75% earlier this year.
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The stock has shown signs of life this year, largely due to its status as a meme stock. It joins Krispy Kreme, Opendoor Technologies, and Rocket Companies as the DORK stocks, an acronym that refers to the four hottest meme stocks in 2025.
Is Kohl's nothing more than a meme play, or is there some value behind the name? Here's what investors should know.
It's hard to compete against the retail giants
Walmart, Costco, and Target are the three retail giants, and the former two have been pulling away from the latter. This context is important for Kohl's stock, since those three retailers offer almost every possible item, including clothing. Why shop at Kohl's when you can buy affordable clothing and groceries at one of the retail giants?
These retail giants let you get everything done in one trip, and Kohl's doesn't give people that luxury. That may be part of the reason Kohl's had yet another quarter that featured year-over-year decreases in net sales and comparable sales. Fewer people are buying from Kohl's locations, and when they show up, they are spending less than they did one year ago. Walmart and Costco don't have that problem and continue to gain market share.
Not only is competition intense, but Kohl's also has low profit margins, which normally hover below 1%. That doesn't give Kohl's any leeway if costs go up or additional tariffs are enforced. It won't even get better for the rest of the year, with Kohl's anticipating net sales dropping by 3.5% to 4% for the full year. Analysts expect full-year comparable sales to drop by 2.5% to 3% year over year.
The balance sheet is a disaster
The balance sheet is a key culprit to Kohl's 42% decline over the past five years, and that drop includes the 2025 meme rally. Kohl's financial situation doesn't give the retailer much flexibility to invest in growth initiatives, and even making a profit is difficult.
Kohl's has $4.3 billion in current assets and $3.3 billion in current liabilities, which comes to a 1.30 current ratio, which sounds good. However, Kohl's has $3.9 billion in merchandise inventories that make up the $4.3 billion. Excluding its inventory, Kohl's only has $400 million in current assets and $3.3 billion in current liabilities, resulting in a 0.12 quick ratio. In short, this low quick ratio suggests minimal cash reserves and burdensome liabilities with upcoming due dates.
That means Kohl's doesn't have a good way to keep up with its financial obligations if inventory sales slow. It's not much of a problem if Kohl's manages to sell all of its inventory, but declining revenue and comparable sales make that scenario more difficult to achieve each year. Furthermore, Kohl's total assets dropped by 6% year over year.
Kohl's also gets its margins squeezed by interest, which won't go away anytime soon. The retailer had $73 million in Q3 operating income, but it spent $75 million on interest. Kohl's reported a positive net income only because of a one-time tax provision of $10 million. Kohl's ended up owing less in taxes than expected and could tap into some of its tax reserves as a result. It's not a winning formula for the long run.
Investors benefit from holding successful growth stocks long-term. However, the fundamentals make Kohl's stock look like a sinking ship struggling to stay afloat. Fundamentals matter more than stock price movements.
Should you buy stock in Kohl's right now?
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, Rocket Companies, Target, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Has Kohl's (KSS) Stock Been Good for Investors?

Key Points
Krispy Kreme is time honored for its doughnuts, but there are still problems with the business.
From a stock perspective, Krispy Kreme is underperforming the market, and struggling with consistent profitability.
The company has put together some turnaround ideas that need a little bit of substance to take seriously.
Doughnuts. We all love them. Despite this, they're not always the dream investment. Some operations do well, while others are struggling right now. Krispy Kreme (NASDAQ: DNUT) makes its money from the sale of its famous doughnuts, as well as coffee and other drinks. The chain has been around for a long time, but has struggled somewhat to find its footing in recent years in terms of profitability.
This is not a stock that has been outperforming. The shares are down more than 77% over the last five years, versus an S&P 500 return of over 85% in gains. Things have been a bit different over the last six months, as the big pullbacks in Krispy Kreme's stock have seemingly led to investors getting reinvigorated in owning shares, despite the fact that the company has some weakening financials. In all, shares are up 46.8% over the last six months.
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Through the last five years, the company has been largely unprofitable. The doughnut/coffee chain had losses in 2020, 2021, 2022, and 2023. Things changed in 2024, but it was a small $3.1 million in net income, off of $1.67 billion in net revenue.
In 2025, the first three quarters have been a little rough. Net revenues declined by 10.39% through the first three quarters of the year to $1.13 billion. Income took a major hit and fell to a net loss attributable to Krispy Kreme of roughly $488 million, versus a profit of $25.5 million in the first nine months of fiscal 2024. In all, Krispy Kreme had losses of $2.86 per diluted share through the first nine months of 2025.
Because of these shifts, the balance sheet is taking some tough hits. While total cash increased slightly year over year in the third quarter to $30.7 million, total equity took a big hit. Shareholders' equity declined 41% year over year to $693.8 million.
The company is undertaking a number of initiatives to attempt to make a turnaround in the business. These include refranchising, which the company claims will improve financial flexibility. A part of this plan is to improve Krispy Kreme's return on invested capital through the aforementioned refranchising and taking advantage of existing assets. The company also says it wants to expand margins through moves such as outsourcing U.S. logistics.
The fourth and final piece of the listed turnaround plan was to "drive sustainable, profitable growth." This one seemed a bit generic, as every company is meant to drive sustainable and profitable growth.
Before buying Krispy Kreme, you need to decide if you're willing to trust that these turnaround measures will have the desired effect. They seem a little vague as to the actual implementation.
Should you invest $1,000 in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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David Butler has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Read This Before Buying Krispy Kreme Stock

Key Points
Krispy Kreme looks cheap for good reasons -- but that could change.
Margins are rising, and refranchising is underway, but profitability remains elusive.
Krispy Kreme's global brand provides a cushion, but execution will ultimately determine whether it becomes a long-term success.
Krispy Kreme (NASDAQ: DNUT) has long been one of America's most recognizable consumer brands. But for investors, it is also a reminder that not every beloved brand translates into a winning stock.
After its 2021 initial public offering (IPO), Krispy Kreme's shares have lost more than half their value, recently falling to $4.40 per share (as of writing), near an all-time low. At first glance, that makes the stock look irresistibly cheap. The company trades at roughly 0.5 times sales, a fraction of what most consumer brands command. But as any seasoned investor knows, a low valuation doesn't always mean a bargain.
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The question is simple: Is Krispy Kreme undervalued, or is it cheap for a reason?
A brand with reach, and a reputation to match
There's no denying the global power of Krispy Kreme's brand. Founded in 1937, the company operates in over 40 countries and sells millions of doughnuts daily. Its nostalgic appeal and emotional connection with customers remain strong, even after decades of ownership changes and financial resets.
For a company with such visibility, its market capitalization of under $800 million seems small. That's less than the valuation of many regional coffee chains, let alone global food-service peers. On the surface, it appears to be a classic small-cap opportunity -- a well-known brand that the market has temporarily overlooked.
But dig deeper, and the valuation reflects something more fundamental: a business model still searching for consistency.
An overview of the key financials
Krispy Kreme generated about $1.6 billion in annual revenue, yet continues to post operating losses. In 2024, the company swung from an operating profit of $13 million to a loss of $9 million. Even in the most recent quarter, ending September 2025, the company remained unprofitable, despite a modest improvement in adjusted EBITDA margin to 10.8%, up from 9.1% in the same quarter a year earlier.
That progress is encouraging, but it also highlights the problem. For a company with global scale, a 10% EBITDA margin is modest at best. Competitors like Starbucks operate at an EBITDA margin above 15%, even as the latter undergoes its own turnaround efforts. In short, Krispy Kreme doesn't yet earn enough on its capital to justify a higher valuation.
This inferior margin explains why the market is skeptical. A price-to-sales ratio of 0.5 looks appealing, but when profits are elusive and returns on invested capital are near zero, even a low multiple can still be expensive.
What are the bulls betting on?
Optimists point to early signs of a real turnaround. Management has been refranchising operations, closing unprofitable outlets, and shifting toward a more capital-light model. The strategy mirrors what other food-service success stories achieved in their transformation phases -- trading ownership for scalability and focusing on high-volume, high-margin distribution points.
There's also the potential for international growth. Krispy Kreme's brand is still underpenetrated in markets like Asia and Latin America, where premium Western dessert brands remain in high demand. If the company can replicate its U.S. awareness abroad, it could achieve steady mid-single-digit revenue growth, accompanied by rising margins over time.
For the bulls, Krispy Kreme appears to be a low-expectations turnaround story with significant upside if execution continues to improve.
Why aren't the bears convinced?
Skeptics counter that Krispy Kreme has been here before. The company has attempted multiple restructurings over the past two decades, each promising efficiency, growth, and margin expansion; yet none have delivered sustainable profitability.
Its "hub-and-spoke" distribution model, while innovative, remains capital-heavy and operationally complex. Each regional hub must maintain enough volume to justify its costs. On the one hand, the food company is closing down unprofitable stores, yet at the same time, it's losing operating leverage. Striking a balance here is a challenging task.
There's also the issue of execution risk. The company's partnership with McDonald's USA, once touted as a national growth engine, was terminated in 2025 after only a few months due to unprofitable unit economics. For bears, that episode encapsulates Krispy Kreme's challenge: scale is easy; profitable scale is not.
What does it mean for investors?
So, does Krispy Kreme stock look cheap? Yes, but only if the turnaround succeeds.
At current prices, the market is clearly pricing in pessimism. If margins climb meaningfully and international growth accelerates, the stock could offer multibagger potential from a small base. But if profits remain inconsistent or the business model fails to scale, "cheap" could quickly become "cheap for a reason."
For investors, the trade-off is simple: Krispy Kreme offers brand-driven upside and execution-driven risk.
It's potentially a high-return stock, but that too comes with a commensurate risk profile.
Should you invest $1,000 in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $572,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,104,969!*
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*Stock Advisor returns as of November 24, 2025
Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Krispy Kreme Stock Looks Cheap -- or Does It?

Key Points
Krispy Kreme is losing a lot of money, negatively impacting its stock price.
It's hard to operate a donut business, as evidenced by the company's $600 million in operating expenses year to date.
It could get an award for its ticker symbol because D-N-U-T appropriately belongs to Krispy Kreme (NASDAQ: DNUT). But this sweet business has delivered sour returns for investors since it went public again in 2021 at $17 per share. Now, it has been trading below $4 per share, having lost about 80% of its value during this time.
Unfortunately for Krispy Kreme investors, stock performance doesn't always match the quality of the business's products. If it did, Krispy Kreme stock may have been a winner thus far. After all, its donuts are considered among the best.
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However, it's difficult to profit from donuts, even when you have good donuts, and that's what matters from an investment perspective.
Just consider Krispy Kreme's financials. Through the first three quarters of 2025, the company generated more than $1.1 billion in product sales, which is mostly donuts. But it's lost about $100 million during this time (after favorably adjusting for a $400 million non-cash impairment charge).
In short, it costs a lot of money to run a donut operation. This means that from a net income perspective, Krispy Kreme hasn't ever been much better than a breakeven business even during its best times, as the chart below shows.
This is the primary reason why Krispy Kreme stock has lost about 80% of its value since 2021.
Are better days possibly ahead?
Krispy Kreme needs to make major changes to its business model to have any hope of better financial results. And that's precisely what it's trying to do right now.
For starters, Krispy Kreme is attacking the largest item on its income statement: operating expenses. The company has accrued $600 million in operating expenses in 2025, which is more than half of its revenue right there. One way to lighten the operating load is by outsourcing U.S. logistics -- it delivers a lot of donuts -- which management is actively pursuing right now.
Krispy Kreme is also attempting to refranchise some of its locations and rework joint venture agreements. In short, running this business is capital-intensive. The idea is for some of these capital requirements to be picked up by franchisees and partners.
These efforts (and others) represent Krispy Kreme's attempt to improve the financials of its business model. That's what the company needs for the stock to perform better in coming years. That said, franchisees, partners, and logistic contractors want to make attractive returns as well, so some changes may be hard for Krispy Kreme to sell.
In conclusion, Krispy Kreme's management is aiming for returns that are as sweet as its donuts. But it will likely take time for it to make improvements that dramatically improve the trajectory of this business.
Should you invest $1,000 in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $563,022!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,012!*
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*Stock Advisor returns as of November 24, 2025
Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How Has DNUT Stock Done for Investors?

Key Points
Krispy Kreme is a well-known household brand.
Management is closing weak stores, refranchising operations, and focusing on profitable growth.
Margins are improving, but revenue remains under pressure.
Krispy Kreme (NASDAQ: DNUT) has long been a brand that evokes nostalgia. For generations of Americans, that glowing "Hot Now" sign meant one thing: A fresh, warm, glazed doughnut -- and often, a moment of indulgent joy.
But while the brand's emotional pull remains strong, its business performance has been far less consistent.
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Today, Krispy Kreme finds itself at a critical crossroads. Once again, the company is in the midst of a turnaround, closing underperforming outlets, refreshing its product lineup, and reevaluating its expansion strategy. Investors are watching closely to see whether this latest iteration can finally transform Krispy Kreme into a sustainable growth business.
A brand that's bigger than its economics
At its core, Krispy Kreme is a branded consumer business built on simple products and high emotional resonance. Founded in 1937, the company has expanded into a global network spanning more than 40 countries, including both company-owned and franchised stores.
However, while the brand itself is iconic, the business behind it has often struggled to deliver high returns consistently. For instance, operating income fell from $13 million in 2023 to a loss of $9 million in 2024.
The company's capital intensity, which involves owning production hubs, logistics systems, and many of its own shops, and its poor revenue performance have led to inconsistent profitability. For instance, it reported another quarter of operating losses in the quarter ended Sept. 28, 2025.
That mix of brand strength and weak economics has defined Krispy Kreme for decades. The latest management team is now trying to rewrite that story.
Management is working hard to turn the ship around
While nobody likes an underperforming business, some investors are optimistic that the company could have better days ahead, primarily as the management team works on its turnaround plan. That includes refranchising in key international and local markets, reducing capital intensity, improving efficiency, and pursuing sustainable revenue growth.
So far, the result has been mixed. On a positive note, adjusted EBITDA margin in the latest quarter improved to 10.8%, up from 9.1% a year ago. Digital sales as a percentage of doughnut shop sales increased 190 basis points to 17.4%, indicating that the company is adapting to changes in consumer habits.
Yet, revenue has struggled to grow. Net revenue declined by 1.2% due to the divestment of Insomnia Cookies and the closure of underperforming stores, offset by stronger performance in the international segment.
For investors, it's still too early to conclude the effectiveness of management's strategies. The key to focus on in the coming quarters will be further expansion of margins and a turnaround in revenue performance.
A missed partnership
Perhaps the most talked-about development this year was the end of Krispy Kreme's highly publicized partnership with McDonald's USA. Initially hailed as a significant growth opportunity, the deal was supposed to put Krispy Kreme doughnuts inside thousands of McDonald's restaurants nationwide.
However, just months later, both companies called off the deal, citing unprofitable unit economics. The decision was a setback, but also a telling moment: Even a powerful brand can't overcome weak distribution economics. For investors, it reinforced a central truth: Krispy Kreme's future depends not on opening more doors, but on opening more profitable ones.
While disappointing, the termination of the joint venture allows Krispy Kreme to refocus its energy on improving the economics of its existing business, which could lead to a better return on investment over the long term.
What does it mean for investors?
Krispy Kreme remains a business in transition -- average today, with the potential to become good tomorrow. The brand is timeless, but the economics are not. Management deserves credit for prioritizing profitability over sheer expansion and for showing early signs of margin recovery.
Still, the company has a long way to go before it earns a place among durable consumer compounders. For now, Krispy Kreme is a turnaround story.
If it can sustain its margin gains, execute its capital-light pivot, and rekindle revenue growth, this could become one of the more interesting stories in the coming quarters. Until then, it's a stock to watch -- not yet one to bite into.
Should you invest $1,000 in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $599,784!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,165,716!*
Now, it’s worth noting Stock Advisor’s total average return is 1,035% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of November 10, 2025
Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Is Everyone Talking About Krispy Kreme Stock?

Key Points
The popular doughnut maker's biggest challenge is its business model.
Most of its locations are company owned, and execution risk is real and ongoing.
Long-term demand growth may be limited by shifting consumer preferences.
Krispy Kreme (NASDAQ: DNUT) is once again trying to prove that its beloved brand can translate into a great business. After years of uneven growth, thin margins, and a failed partnership with McDonald's, management is now focused on profitability -- closing weaker stores, refranchising operations, and improving cash flow.
The early signs are encouraging. The adjusted EBITDA margin has improved, and free cash flow turned positive last quarter. But turnarounds are rarely smooth, and Krispy Kreme's comes with its own set of challenges.
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Here are three key risks that could derail its efforts and keep the company from becoming the scalable, high-return brand that investors hope it can be.
Structural weakness in the business model
The biggest obstacle Krispy Kreme faces is its own business model. Unlike most successful quick-service chains, Krispy Kreme still owns and operates a large share of its stores, production hubs, and delivery networks. That makes the business capital-intensive, requiring constant reinvestment to sustain growth.
Even with its global brand recognition, Krispy Kreme has struggled to deliver sustainable operating profits, unlike its larger peers, such as McDonald's. That's a problem because those competitors benefit from franchise-heavy, asset-light models that produce strong returns on invested capital (ROIC).
Krispy Kreme is attempting to address this issue through refranchising and outsourcing logistics, but these changes take time and come with execution risk. If costs don't come down meaningfully, or if refranchising fails to scale, the company could remain stuck in what investors call a "low-ROIC trap."
In other words, even if Krispy Kreme returns to sustainable revenue growth (which is currently not the case), it may still struggle to convert growth into tangible shareholder value unless it gets its margin problem solved over time.
There are execution risks
Turnarounds require careful balance, and that's precisely what Krispy Kreme must manage now. The company recently closed 960 underperforming "points of access" in a single quarter. While that's positive for profitability, it also shrinks the company's reach and could reduce visibility with consumers.
There's also the risk of overcorrection. If Krispy Kreme cuts too deeply or grows too cautiously, it could lose the very momentum it needs to reinvigorate its brand.
The same tension applies to its hub-and-spoke logistics model, where doughnuts are produced centrally and distributed to stores and retailers. It's a clever setup, until fuel, labor, or distribution costs spike. Then, what was meant to be a scalable model becomes a margin headwind. While the company works to outsource its logistics to become lean, it must do so cautiously to avoid affecting product quality.
In short, for the turnaround to be successful, management must cut costs without reducing capacity, streamline operations without compromising brand presence, and expand profitably without overextending capital. That's a tightrope that few consumer brands walk successfully.
Health trends and competitive pressure
Krispy Kreme's identity has always centered around indulgence. Its signature product, the Original Glazed doughnut, remains a cultural icon. But in today's environment, indulgence comes with limits.
People are increasingly health-conscious, particularly younger demographics who seek "better-for-you" snacks and plant-based options. While there's still a place for occasional treats, the long-term growth of high-sugar products could slow, especially in mature markets.
Meanwhile, competition in the "affordable indulgence" sector is intensifying. Peers like Tim Hortons and Starbucks have expanded their offerings to include bakery and dessert items. Local doughnut shops add another layer of competition, often with creative products and strong social media appeal.
Krispy Kreme's recent menu expansion to 16 flavors indicates that it's trying to evolve, but flavor innovation alone may not be enough to offset these broader shifts. If consumer preferences continue trending toward healthier options, the company could face stagnant demand in key markets.
What does it mean for investors?
Krispy Kreme's brand remains one of the most recognizable in the world. That's its edge, and its cushion. But turning that brand into a consistently profitable business requires navigating high capital costs, operational complexity, and shifting consumer tastes.
If management executes well, this turnaround could mark a genuine inflection point. If not, Krispy Kreme risks staying what it has long been -- a sweet story that never quite compounds.
Should you invest $1,000 in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $599,784!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,165,716!*
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Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Risks That Could Derail Krispy Kreme's Turnaround

Key Points
Profitability is finally improving.
The business model is evolving in the right direction.
The brand remains strong and adaptable.
Krispy Kreme (NASDAQ: DNUT) is one of those rare brands that sparks instant recognition. For decades, the warm glow of its "Hot Now" sign has drawn customers eager for a taste of nostalgia. But for investors, the story has been more complicated.
After years of uneven results, a failed partnership with McDonald's, and multiple attempts at reinvention, Krispy Kreme is once again trying to turn things around. The company is cutting costs, improving efficiency, and focusing on profitability rather than sheer scale.
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While the turnaround is far from completed, the bulls believe this time might be different.
Here are three factors that could help the iconic doughnut maker finally regain its sweetness -- not just in brand appeal but in business performance.
Margin expansion is real and still early on
Krispy Kreme's most recent results show the early signs of operational progress. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin increased to 10.8%, up from 9.1% the previous year. Free cash flow turned positive, and digital sales grew nearly two percentage points to 17.4% of total shop sales.
These are small but meaningful improvements, especially for a company that's been weighed down by high costs and uneven execution. Management's decision to close nearly 1,000 low-performing "points of access" (essentially, store and retail locations) in the last year signals a new focus on profitability over volume.
The strategy is working. By prioritizing high-traffic, high-margin channels and trimming weak spots, Krispy Kreme is building a leaner, more resilient business. If it can sustain this trajectory -- say, moving toward a 12% to 15% EBITDA margin -- the company could generate consistent free cash flow for the first time in years.
For investors, that's a signal that the underlying economics are finally moving in the right direction.
A more innovative and capital-light growth model
One of Krispy Kreme's biggest historical challenges has been its capital intensity. The company has long operated its own stores, hubs, and delivery networks, which has been an expensive model that limits scalability.
This time, management appears determined to rectify that. The new plan centers on refranchising, outsourcing logistics, and focusing on "high-volume, profitable doors." This approach not only reduces capital requirements but also aligns Krispy Kreme with other successful consumer brands that have embraced asset-light strategies -- think Domino's or McDonald's.
What's particularly promising is how this shift could reshape the company's financial profile. Every percentage point of improvement in asset turnover or capital efficiency can compound over time, lifting return on invested capital (ROIC).
If the strategy is successful, Krispy Kreme could eventually transition from being a low-return operator to a high-return franchisor, capable of growing profitably without requiring constant reinvestment. That's the path to becoming a true consumer compounder.
A brand with untapped potential
No turnaround can succeed without customer loyalty -- and Krispy Kreme has that in spades. Few brands can match its mix of nostalgia, emotional connection, and broad global recognition.
Even as revenue growth has stalled, the brand itself remains incredibly strong. In many international markets, Krispy Kreme is still viewed as a premium indulgence rather than a mass-market treat. This gives it significant room to expand globally, particularly in underpenetrated regions such as Asia and Latin America.
Meanwhile, the company is updating its menu to stay relevant. The recent expansion from 10 to 16 everyday flavors, coupled with growing digital engagement, shows a willingness to evolve without losing its identity. Digital sales growth, in particular, suggests that the company is building a modern foundation for direct-to-consumer marketing, loyalty programs, and data-driven promotions.
That combination of heritage and innovation gives Krispy Kreme something rare: a timeless brand that's still flexible enough to adapt.
What does it mean for investors?
Every turnaround begins with doubt, and Krispy Kreme has plenty to overcome: low margins, a complex distribution model, and the overhang of past failures. But investors shouldn't overlook what's quietly changing beneath the surface.
Management has shifted its mindset from grow fast to grow smart. Margins are improving, cash flow is stabilizing, and the company is building a structure that could support profitable expansion rather than reckless growth.
If those trends continue, Krispy Kreme might finally break free from its average business label and begin compounding value over the long term.
The bulls are keeping a close watch on the stock. So should you.
Should you invest $1,000 in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $599,784!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,165,716!*
Now, it’s worth noting Stock Advisor’s total average return is 1,035% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of November 10, 2025
Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Reasons the Bulls Are Optimistic About Krispy Kreme Stock

(RTTNews) - Krispy Kreme, Inc. (DNUT) announced Monday that it will be giving out FREE Original Glazed dozen with the purchase of any regular-priced dozen to share with others to celebrate World Kindness Day on Thursday, November 13.
Krispy Kreme Chief Brand and Product Officer Alison Holder said, "Doughnuts are a sweet way to be kind and show you care - a thoughtful treat straight from the heart ... and the box!
Under the offer, doughnuts can be purchased as a classic dozen or build their own dozen with nine new doughnuts now available every day from Krispy Kreme's refreshed doughnut menu that offers 16 full-sized doughnuts from 10, featuring trending flavors, fan favorites requested on social media, and returning popular doughnuts.
Krispy Kreme's World Kindness Day offer is available Thursday in-shop and via drive-thru at participating U.S. shops and for pickup or delivery via Krispy Kreme's website and app using code BOGOFREE, while supplies last. Limit two per guest.
Krispy Kreme operates in more than 40 countries, many of which will offer World Kindness Day gestures on Thursday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Krispy Kreme Offers FREE Original Glazed Dozen With Any Regular-priced Dozen On World Kindness Day

Key Points
Shares of Krispy Kreme popped in recent days, but remain way down for the year.
The business saw declining revenue and net losses in its most recent quarter.
The impact of its status as a meme stock outweighs any potentially tempting valuation metrics.
While 2025 has been a great year for many stocks, it hasn't been kind to Krispy Kreme (NASDAQ: DNUT). The doughnut company had tumbled from about $10 a share at the start of the year to just $3.26 a share as of Oct. 20.
Since then, though, the stock price has jumped by more than 25%.
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Have investors finally decided Krispy Kreme was too cheap to ignore? Could there be further gains ahead for the troubled doughnut maker? Or is something else going on?
Yes, it's still cheap...
Even after Krispy Kreme's recent share price gain, the stock is now sitting just shy of $4 a share. That's down about 60% year to date and down by 77% from its 2024 high.
There's no denying that this stock is cheap. It's currently trading at a price-to-sales ratio of about 0.4, which is much cheaper than most of its peers. Starbucks (NASDAQ: SBUX), for example, trades at a P/S ratio of 2.6, while McDonald's (NYSE: MCD) has a P/S ratio of 8.4.
Even more astonishing is the company's price-to-book ratio, which compares its market cap to its book value, which is the value of the company's total assets minus its liabilities (in other words, what the company is worth on paper today, which may be very different from its expected future value). Krispy Kreme's price-to-book ratio is currently 0.98. When a company's price-to-book value is less than 1, the market is valuing the business at less than the current value of its assets. In theory, that means that if Krispy Kreme went out of business today, and all its assets were liquidated, the shareholders would get more than the current value of their shares.
...for a reason
The thing is, stocks don't trade at this kind of discount unless investors are concerned about the underlying business' future ability to make money. And Krispy Kreme has given investors plenty of reasons to be concerned recently.
The company's second-quarter earnings report was a disaster, with a 13.5% decline in revenue to $379.8 million and an unadjusted net loss of $441.1 million. Even on an adjusted basis, its EBITDA of $20.1 million was down 63.3% from the prior-year period.
Krispy Kreme's management claimed the quarter was an outlier, pointing to asset impairments stemming from the ending of its distribution partnership with McDonald's, which had failed to generate sufficient profits. The drop in revenue largely stemmed from the recently completed sale of its Insomnia Cookies business. However, even after adjusting for those high-impact circumstances, organic revenue still declined -- although only by 0.8%.
Management withdrew its full-year guidance, citing market uncertainty, and now says it intends to "begin recouping profitability," which doesn't really inspire much confidence in the business.
Meme stock status
In spite of its poor numbers and uncertain outlook, Krispy Kreme's share price moves have been incredibly erratic thanks to its status as a meme stock. In fact, meme stock trading was the reason for its recent 26% surge in price, which came as posts about the company surged in Reddit channels like r/ShortSqueeze and r/WallStreetBets. Similar surges came in July and September, but quickly fizzled.
If the meme stock traders were trying to force a short squeeze, their efforts seem to have been ineffective. Short interest in the company actually ticked upward after the price jump, indicating that more investors expect the stock to fall from its present value.
If Krispy Kreme weren't such a fickle meme stock, it might actually look attractive from a value perspective. With the problematic McDonald's partnership now off the books and shares trading below book value, a case could be made for the stock as a turnaround play, although I'd prefer to hear some more concrete turnaround plans from management first.
However, Krispy Kreme is a meme stock, and given the recent jumps in both price and short interest, smart long-term investors should probably steer clear of it for now.
Should you invest $1,000 in Krispy Kreme right now?
Before you buy stock in Krispy Kreme, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Krispy Kreme wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $603,392!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,241,236!*
Now, it’s worth noting Stock Advisor’s total average return is 1,072% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of October 27, 2025
John Bromels has positions in Starbucks. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Krispy Kreme, Inc.

Price history and volume

Shares 360

Investment risk — medium

Investment potential — medium

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