CHARLOTTE, NC. — As Krispy Kreme, Inc. heads into fiscal 2024 one of its points of emphasis will be modernizing “the making and moving of donuts,” said Josh Charlesworth, president and chief executive officer.
Speaking with analysts during a Feb. 13 earnings conference call, Charlesworth said the concept of modernization “goes all the way from the digitization of the process through to the automation of the donut making itself, and then all the way on to upskilling our donut transportation.”
“All in, we’re working to ensure the freshest donuts every time, delivered as efficiently as possible,” he said. “…We have a line running in New York, which is now automatically filling, topping, and even packing the donuts. We’re looking to perfect that and then roll it out as time goes on.”
Charlesworth also said rapid expansion of Krispy Kreme’s delivered fresh daily business has elevated the importance of logistics. To that end, Charlesworth unveiled plans for a Krispy Kreme pilot program covering select routes in Washington, DC, and Los Angeles.
“The purpose of that is to work with a third-party provider to see if we can maintain quality and service whilst being able to access new capabilities that they can bring and over time, improve our operations and indeed bring more efficiency,” he said. “Sob it’s an effort, end to end, to continuously improve donut making and moving.”
The pilot is expected to last four to six months, he said.
Krispy’s Kreme’s plans for 2024 came against a backdrop of mixed financial results. The company sustained a loss of $37.93 million in the year ended Dec. 31, 2023, which compared with a loss of $15.62 million in fiscal 2022. The most recent year included more than $29 million in costs associated with global transformation and US initiatives such as the decision to exit the Branded Sweet Treats business, which compared with $2.8 million in costs associated mainly of equipment disposals, equipment relocation and installation, consulting and advisory fees, and other costs associated with the shift of Branded Sweet Treats manufacturing capability to Winston-Salem, NC, from Burlington, Iowa.
Adjusted net income in fiscal 2023 totaled $46.21 million, equal to 27¢ per share on the common stock, down from $49.61 million, or 30¢ per share, in fiscal 2022. Adjusted EBITDA in fiscal 2023 was $211.62 million, up from $190.73 million.
Net revenues in fiscal 2023 increased 10% to $1.69 billion from $1.53 billion in the same period a year ago.
“We continued to deliver double-digit organic revenue growth, with all markets and channels growing sales,” he said. “We expanded profit margins by leveraging existing production hubs to support our growth, especially in the US, where operating leverage was strongest. Our ongoing strategy is to scale the business efficiently, providing more fresh points of access. There are now more than 14,100 places where you can buy our melt-in-your-mouth fresh donuts in 39 countries. Our focus on operating excellence means that we’re building both a bigger and better Krispy Kreme business.”
