Why Krispy Kreme Shares Are Rising

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of glazed-doughnut specialist Krispy Kreme Doughnuts popped 17% today after its quarterly results and outlook topped Wall Street expectations.

So what: The stock has soared over the past year on rebounding fundamentals, and today's first-quarter results -- profit increased 33% on 11% revenue growth -- coupled with upside guidance suggest that things are only getting better. In fact, same-store sales jumped 11.4% over the year-ago period, representing its 18th straight quarterly increase, giving investors plenty of confidence in management's ability to grow profitably long-term.


Now what: Management now sees full-year adjusted EPS of $0.59 to $0.63, up from a prior view of $0.53 to $0.57 and also ahead of Wall Street's estimate of $0.55. "We continue to believe we are in the very early stages of developing Krispy Kreme's long-term potential as we continue to execute on our strategic priorities, demonstrate our capability to grow same-store sales, generate significant operating cash flow, and increase earnings over the long term," said Chairman and CEO James Morgan. Of course, with the stock now up about 190% over the past year and trading at a forward P/E of about 25, much of that operating momentum might already be baked into the price.  

Interested in more info on Krispy Kreme? Add it to your watchlist.

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The article Why Krispy Kreme Shares Are Rising originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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