Krispy Kreme Falls; Despite Positive Conference Call

Krispy Kreme

reported its fourth quarter earnings on Wednesday. Shares of the company are down 4%. Below are some key highlights from the company's conference call: New Executive Progress: • The strength of the Krispy Kreme brand is even greater than I originally believed. • I'm excited about the significant growth opportunity we have ahead of us. • We have an extremely talented team committed to long-term success and I am pleased to be working with them to delight our guests and drive shareholder value. • Our brand is all about a craveable, simple, fun, sharing experience with doughnuts that are best-in-class. • Our marketing, operating and culinary teams work tirelessly to drive doughnut use occasions through social media and related marketing. • Looking to our near-term agenda, we believe there is significant growth opportunity in the doughnut category, but one of my top priorities is to leverage. • Expanding our beverage platform so that coffee and other specialty drinks can play a larger role in our total sales mix. • As an example, we are currently testing Frozen Lattes in some of our company shops. Growth: • System wide domestic same-store sales rose 2.8%, including a 1.1% increase at company shops and 3.8% increase at franchise shops. • Our domestic unit development is continuing to gain momentum and is beginning to demonstrate the kind of growth rates that we've enjoyed in our international franchise segment for many years. • We grew our systemwide unit count by 3.4% in the quarter and 6.8% year-to-date, adding a net total of 56 shops so far in fiscal 2015. • As you know, earlier this year Krispy Kreme began testing packaged ground coffee in Sam's Club and we introduced ready-to-drink Iced Coffees in over 1,000 Walmart stores. • In addition, we've been working in our wholesale channel to expand product assortment with longer shelf life items. • We plan to introduce more of these new product between now and the end of the year. • Another focus area is continued development and deployment of technology to improve our business. • Following traffic softness in the first quarter, we used promotional incentives to drive traffic and to acquire new customers. Results: • Total revenues increased 7% in the quarter to just over $120 million. • Operating income was $9.6 million compared to $10.6 million • Total on-premises sales increased over 7% from last year and same-store sales at company shops rose 1.1%. • With comps up 10.5% in the second quarter last year, we were pleased with the two-year stack of 11.6%.