Wall Street Watch Tuesday: Krispy Kreme's Earnings Are Delicious

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\Krispy Kreme's Earnings Are DeliciousThere's apparently still a healthy appetite for Krispy Kreme's (KKD) unhealthy sugary treats.

The doughnut maker posted blowout quarterly results after Monday's market close.

Revenue climbed 9 percent to $107.1 million, fueled by a robust 6.8 percent spike in same store sales. Comps have been positive at Krispy Kreme for 16 consecutive quarters. Things look even better on the bottom line, as adjusted earnings soared 76 percent to $0.12 a share. Analysts were only holding out for a profit of $0.08 a share on $104.6 million in revenue.

There are now 731 Krispy Kreme stores out there, and just 96 of the locations are company-owned. Most of the doughnuts consumers enjoy come from either franchise locations or the company's growing retail distribution.

Krispy Kreme is apparently a hit overseas, too. More than 75 of the roughly 100 locations that will open in the next fiscal year will be international franchise locations.

Given the company's rosy performance it isn't a surprise to see it raise its guidance for the balance of this fiscal year and initiate an upbeat outlook for next year. The company's doughnuts may be glazed, but the similarly coated optimism is a winning recipe for investors.

Other Things Worth Watching

• Nuance Communications (NUAN) probably didn't want to shout out the news: The pioneer of voice-recognition technology announced softer than expected revenue after Monday's market close. Revenue rose 28 percent to $468.8 million. That's impressive, but it's well short of the $498 million that analysts were forecasting. Nuance is in a promising place as its technology moves beyond automated phone banks to voice-activated smartphones and cars.

• Retailers are posting mixed results this earnings season. Urban Outfitters (URBN) checked in on the disappointing end of the mall spectrum on Monday night. Urban Outfitters rang up a profit of $0.40 a share, just shy of what Wall Street was expecting as comparable store sales slipped 1 percent. Gross profit margins are improving as the chain is resorting to fewer markdowns, but it's not where it wants to be ahead of the telltale holiday shopping season.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. Motley Fool newsletter services have recommended buying shares of Nuance Communications.



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street163

I wouldn't touch this stock with a 10 foot pole, if they have been doing so well, where is the dividend? I remember in 2000 this stock went up like a rocket and could not sustain it's valuation.Any way.....at this time, I thought the world is suppose to be fighting obesity.

November 21 2012 at 7:27 AM Report abuse rate up rate down Reply
Gary

Thats great for them and stockholders. Now watch the CEO's take there big share of the profits, who like they really did something.

November 20 2012 at 4:14 PM Report abuse rate up rate down Reply
billdfalls

There is no accounting for poor taste. Given the obesity in this country their results don't surprise me.

November 20 2012 at 2:59 PM Report abuse rate up rate down Reply
Anne Boleyns Crown

Sadly, I understand. Krispy Kreme glazed doughnuts, especially when you get them when the HOT NOW sign is on, melt on your tongue!! I am glad I don't live close to one anymore. But they are the ultimate sinful treat when I do see one.

November 20 2012 at 1:37 PM Report abuse rate up rate down Reply
dot98

We had one in my town in PA that lasted about a year or two. Went out of business and ChicFila (?) You can tell I don't eat there...can't even spell it....anyhow, they took over that space and we now have 3, if you count the one in the mall and they always seem to be crowded. I might want to try that!

November 20 2012 at 12:27 PM Report abuse rate up rate down Reply
Somey

What are they cooking this time besides doughnuts; the books????????????????????????

November 20 2012 at 12:20 PM Report abuse +2 rate up rate down Reply
golfet33

KK are mostly in right to work states. Mostly down south not up north

November 20 2012 at 11:39 AM Report abuse +1 rate up rate down Reply
David

So what!

November 20 2012 at 11:32 AM Report abuse rate up rate down Reply
David

So what!

November 20 2012 at 11:32 AM Report abuse rate up rate down Reply
akhaggard

Gail,

Your father was right. Why don't you have KK now?

November 20 2012 at 10:36 AM Report abuse rate up rate down Reply