USA- Multinational coffeehouse chain and doughnut company Krispy Kreme has recorded a US$5.49 million net loss for Q2 2024 despite a slight increase in operating income from US$5.65 million to US$6.86 million.
The reported net loss is in stark contrast to the US$223,000 net income reported in the same quarter last year.
The doughnut company also reported a net revenue increase of US$438.8 million in the reported quarter, compared to US$408.8 million in Q2 2023.
Sales also increased from US$400.35 million in Q2 2023 to US$429.41 million in Q2 2024.
The net loss is attributed to an increase in expenses, a direct result of ravaging inflation.
Operating expenses increased from US$189.17 million recorded in Q2 2023 to US$212.5 million in the reported quarter. General, selling and administrative expenses also increased from US$64.47 million, compared to US$62.58 million reported in Q2 2023.
However, the company’s North American segment benefitted from strong performance in the US as well as its hub and spoke optimization strategy.
The US reported the most significant revenue increase of 8.2% in the reported quarter. Digital sales increased by 26%, while delivered fresh daily (DFD) sales increased by 24%.
Adjusted EBITDA (earnings before interest, taxation, depreciation and amortization) for the US wing increased by 16.3% to US$32.7 million thanks to the hub and spoke model, which optimized labour, waste management and enhanced productivity.
EBITDA for its international wing decreased by 12.3% to US$21.7 million. The coffeehouse chain and doughnut company revealed a significant decline in sales and transaction volumes in the UK.
Krispy Kreme’s international segment reported a 3.9% increase in net revenue. Organic revenue increased by 5%, which was attributed to a 39% increase in point of access (POA) sales.
For H1 2024, the company recorded a net loss of US$14.03, a significant increase from the US$78,000 net loss recorded in H1 2023.
The performance is a reflection of the challenging QSR environment. Krispy Kreme and its competitors have reported stark increases in input and raw material costs, translated to customers through higher prices. These higher prices have stifled demand as cash-weary customers become frugal.
However, the company has praised its performance despite a challenging market environment.
Josh Charlesworth, Krispy Kreme’s CEO, said, “Krispy Kreme had another strong quarter as our fresh doughnuts are becoming even easier to purchase and more available globally.”
“Our innovative speciality doughnut collections continue to resonate with consumers and drove increased DFD and digital sales in the quarter.”
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