EX-99.1 2 exh991q2pressrelease2023.htm EX-99.1 Document
EXHIBIT 99.1

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Krispy Kreme Reports Second Quarter 2023 Results, Reiterates Full Year Guidance
Second quarter net revenue grew 9.0% with organic revenue growth of 11.4%
Global Points of Access grew by 12.8% to 12,872
GAAP net income of $0.1 million and Adjusted EBITDA of $48.8 million

CHARLOTTE, NC (August 10, 2023) – Krispy Kreme, Inc. (NASDAQ: DNUT) (“Krispy Kreme” or the “Company”) today reported financial results for the second quarter ended July 2, 2023. Net revenue grew 9.0% year-over-year to $408.9 million and organic revenue grew 11.4%, led by the U.S., where all sales channels including doughnut and cookie shops, Delivered Fresh Daily (“DFD”) doors, and ecommerce contributed to 12.7% organic growth in the quarter.
GAAP net income for the quarter was $0.1 million compared to net loss of $2.4 million a year ago while GAAP diluted EPS for the quarter was $0.00 compared to diluted loss per share of $0.02 last year. Adjusted diluted EPS decreased $0.01 to $0.07 for the quarter, compared to $0.08 last year in the same period, driven by higher net interest expense. Adjusted EBITDA increased 3.1% in the quarter to $48.8 million led by the U.S. and Market Development segments.
Global Points of Access, which reflect all locations where fresh doughnuts and cookies can be purchased, increased by 462 during the quarter and 1,035 year-to-date, providing consumers with access to Krispy Kreme and Insomnia Cookies through 12,872 locations around the world.
Commenting on the Company’s performance, CEO Mike Tattersfield stated, “I am proud of the results we delivered in the second quarter, which were bolstered by our continued focus on expanding our hub and spoke model as we leaned heavily into our omni-channel and DFD capabilities as well as our international expansion strategy. We executed the strongest and largest National Doughnut Day in our history, which we now celebrate in a dozen countries. We are also pleased with our continued global expansion, as we opened three new markets during the quarter in Chile, Jamaica, and Costa Rica, all exceeding our revenue growth targets.”
Mike continued, “We look forward to capitalizing on a strong start to the year in the back half of 2023 and delivering profitable growth as we focus on our capital efficient hub and spoke model and omni-channel strategy. We continue to expect to open in three to five additional markets in 2023, and recently opened in Switzerland which marked our first opening in Continental Europe to be followed by France before year-end. Overall, we remain on our path to grow Global Points of Access and become the most loved sweet treat brand in the world.”

Financial Highlights
$ in millions, except per share dataQ2
2023		vs Q2
2022		1H 2023vs. 1H 2022
Net Revenue$408.9+9.0%$827.8+10.7%
Organic Revenue (1)
$406.8+11.4%$829.3+12.9%
GAAP Net Income$0.1+103.5%$1.7(57.3)%
Adjusted Net Income, Diluted (1)
$11.4(13.1)%$26.7+1.3%
GAAP Operating Income$5.6(24.8)%$20.6(17.0)%
GAAP Operating Income Margin1.4%-60 bps2.5%-80 bps
Adjusted EBITDA (1)
$48.8+3.1%$103.7+7.8%
Adjusted EBITDA Margin (1)
11.9%-70 bps12.5%-40 bps
GAAP Diluted EPS$0.00+$0.02$0.00$0.00
Adjusted Diluted EPS (1)
$0.07($0.01)$0.16$0.00
Notes:
(1)Non-GAAP figures – please refer to Reconciliation of Non-GAAP Financial Measures.



Key Operating Metrics
$ in millions, except access pointsQ2
2023		vs Q2
2022		vs Q1
2023
Global Points of Access12,872+12.8%+3.7%
Sales per Hub (U.S.) TTM$4.7+9.3%+2.2%
Sales per Hub (International) TTM$9.7+3.2%(1.0)%
Ecommerce as a Percent of Retail Sales18.8%+130 bps-80 bps
Second Quarter 2023 Consolidated Results
Krispy Kreme’s second quarter 2023 results reflect strong growth compared to the prior year. Net revenue grew 9.0% to $408.9 million and total company organic revenue grew 11.4% in the quarter. Organic revenue growth was driven by a strong performance in all three business segments. Ecommerce revenue growth in the quarter was 18.0% and represented 18.8% of retail sales in the quarter.
GAAP net income for the quarter was $0.1 million, compared to a GAAP net loss of $2.4 million in 2022. GAAP net income included a $4.4 million charge related to the previously disclosed exit of the Company’s Branded Sweet Treats business that was largely non-cash. Inventory write-offs and employee severance associated with the exit of the Branded Sweet Treats business had a 70 basis point impact on product and distribution costs as a percent of revenue in the second quarter of 2023.
Adjusted EBITDA in the quarter grew 3.1% to $48.8 million despite an approximate $0.5 million negative impact from the stronger U.S. dollar. Operating margins declined 60 basis points to 1.4%, while Adjusted EBITDA margins declined 70 basis points to 11.9% as pricing initiatives and hub and spoke efficiencies were offset by inflationary pressure and the timing of certain performance-based incentives. Adjusted Net Income, Diluted, decreased 13.1% to $11.4 million in the quarter. GAAP diluted EPS in the quarter was $0.00 compared to a loss per share of $0.02 in the same quarter last year, while adjusted diluted EPS decreased 12.5% to $0.07 from $0.08 in the second quarter of 2022, due primarily to higher net interest expense.
Second Quarter 2023 Market Segment Results
U.S.: In the U.S. segment, net revenue grew $22.8 million, or approximately 9.3%, and organic revenue increased $29.8 million, or approximately 12.7%, compared to a year ago. Organic growth was driven by successful pricing actions, marketing activations, and expansion of our DFD strategy. Sales per hub in the U.S. increased 9% to $4.7 million and DFD average sales per door increased 16% year over year to $632 per week, with an additional 815 Points of Access compared to the second quarter of fiscal 2022. Additionally, ecommerce as a percent of retail sales grew 260 basis points. This level of performance was achieved despite short-term disruption from a third-party POS provider during the first part of the quarter, which has since been resolved. We also saw strong revenue performance at Insomnia Cookies which opened 23 new Cookie Shops in the trailing four quarters.
U.S. Adjusted EBITDA increased 16.3% to $28.1 million with Adjusted EBITDA margin expansion of 60 basis points to 10.5%. This was primarily driven by network optimizations and price increases augmenting Sales per Hub, partially offset by inflation and labor inefficiencies due to the temporary outages associated with a third-party POS provider. Profitability at Insomnia Cookies was pressured because of the impact of higher product and distribution costs, partially offset by pricing, as well as timing of investments to support strategic growth initiatives.
International: In the International segment, net revenue grew $4.5 million, or approximately 4.8%, from the second quarter of fiscal 2022 to the second quarter of fiscal 2023, aided by foreign currency translation impacts of $1.2 million from a weakening U.S. dollar. International organic revenue grew $3.3 million, or approximately 3.5%, from the second quarter of fiscal 2022 to the second quarter of fiscal 2023, driven by increased pricing and Points of Access growth of 245 locations, or 7%, compared to the second quarter of fiscal 2022.
International Adjusted EBITDA declined 0.4% compared to the prior year at $19.5 million, driven by cost inflation. Adjusted EBITDA margins declined 100 basis points to 19.8%. We have already begun to see results from the actions taken in the International segment, focused on expansion with key partners, including adding Krispy Kreme to consumer loyalty card programs, deploying pricing and cost control initiatives, and optimizing price pack architecture in the U.K. DFD market.
Market Development: In the Market Development segment, net revenue increased $6.4 million, or approximately 17.4%, from the second quarter of fiscal 2022 to the second quarter of fiscal 2023, despite the impacts of certain foreign currencies devaluing against the U.S. dollar. When adjusted for the impacts of acquisitions and foreign currency, Market Development organic revenue grew $8.5 million, or approximately 23.2%, from the second quarter of fiscal 2022 to the second quarter of fiscal 2023,


driven by strong performance in the Company’s international franchise markets, Canada, and Japan, aided by Hub and Spoke model expansion.
Market Development Adjusted EBITDA grew 27.3% to $15.7 million, with strong margin improvement in the Company’s equity-owned Japan and Canada markets from hub and spoke efficiencies and strength in international franchise revenue more than offsetting inflation and the strong U.S. dollar. Adjusted EBITDA margins for the segment increased 290 basis points to 36.5% despite a negative impact from mix shift.
Balance Sheet & Capital Expenditures
During the second quarter of 2023, the company invested $27.7 million in capital expenditures, or 6.8% of revenue, primarily to support growth of our hot light theaters, cookie shops, and DFD Doors.

As of July 2, 2023 the company had total available liquidity of $201.6 million, including $26.6 million of cash and cash equivalents plus undrawn capacity of $175 million under available credit facilities, and net debt of $833.5 million. In line with the strategic decision to reduce reliance on vendor financing programs, the Company paid down a further $33.7 million in structured payables and supply chain financing vehicles in the second quarter which will provide a long-term tailwind to Adjusted EBITDA.
2023 Financial Outlook
Krispy Kreme re-affirms its previous guidance for the full year 2023 as follows:
•Net Revenue of $1.65 billion to $1.68 billion, +8% to +10% vs 2022 (+9% to +11% in constant currency)
•Organic Revenue growth of 9% to 11%
•Adjusted EBITDA of $205 million to $215 million, +8% to +13% vs 2022 (+10% to +14% in constant currency)
•Adjusted Net Income, Diluted, of $52 million to $58 million, +5% to +17% vs 2022 (+9% to +21% in constant currency)
•Adjusted Diluted EPS of $0.31 to $0.34, +7% to +17% vs 2022 (+10% to +21% in constant currency)
•Income Tax rate between 24.5% to 26.0%
•Capital Expenditures between $105 million to $115 million, or approximately 6.6% of revenue
•Interest Expense, net between $39 million to $43 million
The above guidance continues to assume a negative 1% impact to 2023 revenue and a negative $3 million impact to 2023 Adjusted EBITDA from FX headwinds, with the impact entirely in the first half of the year. The Company expects to reduce its net leverage in 2023, as we make progress towards our 2026 goal of approximately 2.0x to 2.5x net leverage.
Definitions
The following definitions apply to terms used throughout this press release:
•Global Points of Access: Reflects all locations at which fresh doughnuts or cookies can be purchased. We define global points of access to include all Hot Light Theater Shops, Fresh Shops, Carts and Food Trucks, DFD Doors and Cookie Shops, at both Company-owned and franchise locations as of the end of the respective reporting period. We monitor global points of access as a metric that informs the growth of our omni-channel presence over time and believe this metric is useful to investors to understand our footprint in each of our segments.
•Hubs: Reflects locations where fresh doughnuts are produced and processed for sale at any point of access. We define Hubs to include self-sustaining Hot Light Theater Shops and Doughnut Factories, at both Company-owned and franchise locations as of the end of the respective reporting period.
•Sales Per Hub: Sales per Hub equals Fresh Revenues from Hubs with Spokes, divided by the average number of Hubs with Spokes at the end of the five most recent quarters.
•Fresh Revenues from Hubs with Spokes: Fresh Revenues include product sales generated from our Doughnut Shop business (including Ecommerce and delivery), as well as DFD sales, but excluding sales from our legacy wholesale business and our Branded Sweet Treat Line. It also excludes all Insomnia Cookies revenues as the measure is focused on the Krispy Kreme business. Fresh Revenues from Hubs with Spokes equals the Fresh Revenues derived from those Hubs currently producing product for other shops, Carts and Food Trucks, and/or DFD Doors, but excluding Fresh Revenues derived from those Hubs not currently producing product for other shops, Carts and Food Trucks, and/or DFD Doors.
•Total Net Leverage Ratio: Calculated using Net Debt (including both bank debt and financing leases as part of debt) divided by Adjusted EBITDA.
•Free Cash Flow: Defined as cash provided by operating activities less purchases of property and equipment.
Conference Call


Krispy Kreme will host a public conference call at 8:30 AM Eastern Time today to discuss its results for the second quarter of 2023. The conference call can be accessed by dialing 1 (800) 599-5188 and entering the conference ID 5487868. International participants can access the call via the corresponding number listed here and entering the conference ID 5487868. To listen to the live audio webcast and Q&A, visit the Krispy Kreme investor relations website at investors.krispykreme.com. A replay and transcript of the webcast will be available on the website within 24 hours after the call. Krispy Kreme’s earnings press release and related materials will also be available on the investor relations section of the Company’s website.


Investor Relations
ir@krispykreme.com
Financial Media
Edelman Smithfield for Krispy Kreme, Inc.
Ashley Firlan & Ashna Vasa, KrispyKremeIR@edelman.com
About Krispy Kreme
Headquartered in Charlotte, N.C., Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Our iconic Original Glazed® doughnut is universally recognized for its hot-off-the-line, melt-in-your-mouth experience. Krispy Kreme operates in 35 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing Ecommerce and delivery business with nearly 13,000 fresh points of access. Our purpose of touching and enhancing lives through the joy that is Krispy Kreme guides how we operate every day and is reflected in the love we have for our people, our communities and the planet. Connect with Krispy Kreme Doughnuts at www.KrispyKreme.com, or on one of its many social media channels, including www.Facebook.com/KrispyKreme and www.Twitter.com/KrispyKreme.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. The words “believe,” “may,” “could,” “will,” “should,” “anticipate,” “estimate,” “expect,” “outlook,” “guidance,” or similar words, or the negative of these words, identify forward-looking statements. Such forward-looking statements are based on certain assumptions and estimates that we consider reasonable but are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial conditions, business, prospects, growth strategy and liquidity. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause actual results to differ from those expressed in forward-looking statements include, without limitation, the risks and uncertainties described under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended January 1, 2023, filed by us with the Securities and Exchange Commission (“SEC”) and described in the other filings we make from time to time with the SEC. We believe that these factors include, but are not limited to, the impact of pandemics, changes in consumer preferences, the impact of inflation, and our ability to execute on our omni-channel business strategy. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statement to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
Non-GAAP Measures
This press release includes certain non-GAAP financial measures including organic revenue growth, Adjusted EBITDA, Adjusted Net Income, Diluted, Adjusted Diluted EPS, Fresh Revenue from Hubs with Spokes and Sales per Hub, which differ from results using U.S. Generally Accepted Accounting Principles (“GAAP”). These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP financial measures in conjunction with our historical consolidated financial statements and notes thereto filed with the SEC.
To the extent that the Company provides guidance, it does so only on a non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inability to predict the amount and timing of impacts outside of the Company’s control on certain items, such as net income and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.


Krispy Kreme, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
Quarter EndedTwo Quarters Ended
July 2, 2023 (13 weeks)July 3, 2022 (13 weeks)July 2, 2023 (26 weeks)July 3, 2022 (26 weeks)
Net revenues
Product sales$400,348 $367,777 $811,022 $731,829 
Royalties and other revenues8,534 7,468 16,810 15,948 
Total net revenues408,882 375,245 827,832 747,777 
Product and distribution costs111,106 100,558 228,939 196,669 
Operating expenses189,165 173,942 380,573 342,668 
Selling, general and administrative expense62,582 51,754 124,050 105,465 
Marketing expenses9,770 11,215 19,623 21,374 
Pre-opening costs1,104 985 1,868 2,314 
Other expenses/(income), net314 1,469 (4,949)(1,164)
Depreciation and amortization expense29,196 27,814 57,135 55,655 
Operating income5,645 7,508 20,593 24,796 
Interest expense, net12,063 7,586 24,051 14,937 
Other non-operating expense, net1,061 756 2,060 435 
(Loss)/income before income taxes(7,479)(834)(5,518)9,424 
Income tax (benefit)/expense(7,563)1,574 (7,246)5,374 
Net income/(loss)84 (2,408)1,728 4,050 
Net (loss)/income attributable to noncontrolling interest(139)1,441 1,806 3,897 
Net income/(loss) attributable to Krispy Kreme, Inc.$223 $(3,849)$(78)$153 
Net income/(loss) per share:
Common stock — Basic$— $(0.02)$— $— 
Common stock — Diluted$— $(0.02)$— $— 
Weighted average shares outstanding:
Basic168,184 167,367 168,162 167,314 
Diluted170,659 167,367 168,162 167,314 


Krispy Kreme, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
As of
 (Unaudited) July 2, 2023January 1, 2023
ASSETS
Current assets:
Cash and cash equivalents$26,635 $35,371 
Restricted cash339 359 
Accounts receivable, net49,381 51,089 
Inventories33,977 46,239 
Taxes receivable17,354 18,263 
Prepaid expense and other current assets31,635 26,953 
Total current assets159,321 178,274 
Property and equipment, net492,233 472,358 
Goodwill1,099,393 1,087,908 
Other intangible assets, net960,094 966,088 
Operating lease right of use asset, net443,277 417,381 
Other assets19,826 26,528 
Total assets$3,174,144 $3,148,537 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$40,722 $40,034 
Current operating lease liabilities42,932 43,160 
Accounts payable216,407 225,276 
Accrued liabilities96,199 104,424 
Structured payables50,447 103,575 
Total current liabilities446,707 516,469 
Long-term debt, less current portion814,476 739,052 
Noncurrent operating lease liabilities439,103 412,759 
Deferred income taxes, net134,130 143,124 
Other long-term obligations and deferred credits33,453 38,258 
Total liabilities1,867,869 1,849,662 
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 300,000 shares authorized as of both July 2, 2023 and January 1, 2023; 168,184 and 168,137 shares issued and outstanding as of July 2, 2023 and January 1, 2023, respectively
1,682 1,681 
Additional paid-in capital1,432,150 1,426,105 
Shareholder note receivable(3,809)(4,813)
Accumulated other comprehensive income/(loss), net of income tax7,784 (9,151)
Retained deficit(229,340)(217,490)
Total shareholders’ equity attributable to Krispy Kreme, Inc.1,208,467 1,196,332 
Noncontrolling interest97,808 102,543 
Total shareholders’ equity1,306,275 1,298,875 
Total liabilities and shareholders’ equity$3,174,144 $3,148,537 


Krispy Kreme, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 Two Quarters Ended
 July 2, 2023 (26 weeks)July 3, 2022 (26 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income$1,728 $4,050 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense57,135 55,655 
Deferred income taxes(11,743)(6,866)
Loss on extinguishment of debt472 — 
Impairment and lease termination charges7,808 1,991 
Gain on disposal of property and equipment(151)(499)
Gain on sale-leaseback(9,646)(2,374)
Share-based compensation10,369 10,493 
Change in accounts and notes receivable allowances372 193 
Inventory write-off10,244 251 
Settlement of interest rate swap derivatives7,657 — 
Amortization related to settlement of interest rate swap derivatives(4,379)— 
Other996 (733)
Change in operating assets and liabilities, excluding foreign currency translation adjustments(24,609)(8,238)
Net cash provided by operating activities46,253 53,923 
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Purchase of property and equipment(54,290)(51,460)
Proceeds from sale-leaseback10,025 3,000 
Other investing activities163 181 
Net cash used for investing activities(44,102)(48,279)
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Proceeds from the issuance of debt989,198 53,000 
Repayment of long-term debt and lease obligations(916,580)(50,179)
Payment of financing costs(5,000)— 
Proceeds from structured payables73,939 153,097 
Payments on structured payables(126,920)(133,530)
Payment of contingent consideration related to a business combination— (900)
Capital contribution by shareholders, net of loans issued631 (27)
Payments of issuance costs in connection with IPO— (12,458)
Proceeds from sale of noncontrolling interest in subsidiary— 410 
Distribution to shareholders(11,771)(11,710)
Payments for repurchase and retirement of common stock(147)(2,363)
Distribution to noncontrolling interest(11,246)(9,496)
Net cash used for financing activities(7,896)(14,156)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(3,011)(4,473)
Net decrease in cash, cash equivalents and restricted cash(8,756)(12,985)
Cash, cash equivalents and restricted cash at beginning of period35,730 39,192 
Cash, cash equivalents and restricted cash at end of period$26,974 $26,207 
Net cash provided by operating activities$46,253 $53,923 
Less: Purchase of property and equipment(54,290)(51,460)
Free cash flow$(8,037)$2,463 


Krispy Kreme, Inc.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share amounts)
Quarter Ended Two Quarters Ended
(in thousands)July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Net income/(loss)$84 $(2,408)$1,728 $4,050 
Interest expense, net12,063 7,586 24,051 14,937 
Income tax (benefit)/expense(7,563)1,574 (7,246)5,374 
Depreciation and amortization expense29,196 27,814 57,135 55,655 
Share-based compensation4,824 5,452 10,369 10,493 
Employer payroll taxes related to share-based compensation189 35 214 90 
Other non-operating expense, net (1)
1,061 756 2,060 435 
Strategic initiatives (2)
4,477 120 17,946 120 
Acquisition and integration expenses (3)
339 82 430 599 
New market penetration expenses (4)
241 260 335 370 
Shop closure expenses, net (5)
1,484 1,894 805 2,124 
Restructuring and severance expenses (6)
1,667 476 2,247 476 
Gain on sale-leaseback15 — (9,646)(2,374)
Other (7)
737 3,720 3,314 3,919 
Adjusted EBITDA$48,814 $47,361 $103,742 $96,268 
Quarter Ended Two Quarters Ended
(in thousands)July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Segment Adjusted EBITDA:
U.S.
$28,085 $24,155 $66,620 $56,562 
International
19,463 19,535 33,030 36,779 
Market Development
15,734 12,357 32,700 24,845 
Corporate
(14,468)(8,686)(28,608)(21,918)
Adjusted EBITDA$48,814 $47,361 $103,742 $96,268 


Quarter Ended Two Quarters Ended
(in thousands, except per share amounts)
July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Net income/(loss)$84 $(2,408)$1,728 $4,050 
Share-based compensation4,824 5,452 10,369 10,493 
Employer payroll taxes related to share-based compensation189 35 214 90 
Other non-operating expense, net (1)
1,061 756 2,060 435 
Strategic initiatives (2)
4,477 120 17,946 120 
Acquisition and integration expenses (3)
339 82 430 599 
New market penetration expenses (4)
241 260 335 370 
Shop closure expenses, net (5)
1,484 2,144 805 2,374 
Restructuring and severance expenses (6)
1,667 476 2,247 476 
Gain on sale-leaseback15 — (9,646)(2,374)
Other (7)
737 3,720 3,314 3,919 
Amortization of acquisition related intangibles (8)
7,368 6,978 14,641 14,224 
Loss on extinguishment of 2019 Facility (9)
— — 472 — 
Tax impact of adjustments (10)
(9,464)(2,341)(14,120)(3,419)
Tax specific adjustments (11)
(1,758)(628)(2,315)(628)
Net loss/(income) attributable to noncontrolling interest139 (1,441)(1,806)(3,897)
Adjustment to adjusted net income attributable to common shareholders— — — (374)
Adjusted net income attributable to common shareholders - Basic$11,403 $13,205 $26,674 $26,458 
Additional income attributed to noncontrolling interest due to subsidiary potential common shares(4)(83)(7)(122)
Adjusted net income attributable to common shareholders - Diluted$11,399 $13,122 $26,667 $26,336 
Basic weighted average common shares outstanding168,184 167,367 168,162 167,314 
Dilutive effect of outstanding common stock options, RSUs, and PSUs2,475 1,973 2,163 2,099 
Diluted weighted average common shares outstanding170,659 169,340 170,325 169,413 
Adjusted net income per share attributable to common shareholders:
Basic$0.07 $0.08 $0.16 $0.16 
Diluted$0.07 $0.08 $0.16 $0.16 
(1)Primarily foreign translation gains and losses in each period.
(2)The quarter and two quarters ended July 2, 2023 consist primarily of costs associated with the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs.
(3)Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period.
(4)Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including the Insomnia Cookies brand entering Canada and the U.K.
(5)Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment.
(6)The quarter and two quarters ended July 2, 2023 consist primarily of costs associated with restructuring of the global executive teams.
(7)The quarter and two quarters ended July 2, 2023 and July 3, 2022 consist primarily of legal and other regulatory expenses incurred outside the ordinary course of business. The regulatory expenses incurred in the quarter ended April 2, 2023 relate to business acquisitions.
(8)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the Condensed Consolidated Statements of Operations.
(9)Includes interest expenses related to unamortized debt issuance costs from the 2019 Facility associated with extinguished lenders as a result of the March 2023 debt refinancing.
(10)Tax impact of adjustments calculated applying the applicable statutory rates. The quarter and two quarters ended July 2, 2023 and July 3, 2022 also include the impact of disallowed executive compensation expense.
(11)The quarter and two quarters ended July 2, 2023 consist of the recognition of a previously unrecognized tax benefit unrelated to ongoing operations, the effect of tax law changes on existing temporary differences, and a discrete tax benefit unrelated to ongoing operations.


Krispy Kreme, Inc.
Segment Reporting (Unaudited)
(in thousands, except percentages or otherwise stated)
 Quarter Ended Two Quarters Ended
 July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Net revenues:
 
 
 
 
U.S.$267,417 $244,665 $548,761 $492,584 
International98,332 93,853 188,620 181,054 
Market Development43,133 36,727 90,451 74,139 
Total net revenues$408,882 $375,245 $827,832 $747,777 
Q2 2023 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in second quarter of fiscal 2023$267,417 $98,332 $43,133 $408,882 
Total net revenues in second quarter of fiscal 2022
244,665 93,853 36,727 375,245 
Total Net Revenues Growth22,752 4,479 6,406 33,637 
Total Net Revenues Growth %9.3 %4.8 %17.4 %9.0 %
Less: Impact of shop optimization closures(3,330)— — (3,330)
Less: Impact of Branded Sweet Treats exit(6,701)— — (6,701)
Adjusted net revenues in second quarter of fiscal 2022234,634 — 93,853 36,727 365,214 
Adjusted net revenue growth32,783 4,479 6,406 43,668 
Impact of acquisitions(3,023)— 877 (2,146)
Impact of foreign currency translation— (1,224)1,239 15 
Organic Revenue Growth$29,760 $3,255 $8,522 $41,537 
Organic Revenue Growth %12.7 %3.5 %23.2 %11.4 %
Q2 2023 Organic Revenue - YTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first two quarters of fiscal 2023$548,761 $188,620 $90,451 $827,832 
Total net revenues in first two quarters of fiscal 2022
492,584 181,054 74,139 747,777 
Total Net Revenues Growth56,177 7,566 16,312 80,055 
Total Net Revenues Growth %11.4 %4.2 %22.0 %10.7 %
Less: Impact of shop optimization closures(6,517)— — (6,517)
Less: Impact of Branded Sweet Treats exit(6,701)— — (6,701)
Adjusted net revenues in first two quarters of fiscal 2022479,366 181,054 74,139 734,559 
Adjusted net revenue growth69,395 7,566 16,312 93,273 
Impact of acquisitions(6,103)— 1,770 (4,333)
Impact of foreign currency translation— 2,084 3,710 5,794 
Organic Revenue Growth$63,292 $9,650 $21,792 $94,734 
Organic Revenue Growth %13.2 %5.3 %29.4 %12.9 %


Q2 2022 Organic Revenue - QTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in second quarter of fiscal 2022$244,665 $93,853 $36,727 $375,245 
Total net revenues in second quarter of fiscal 2021
230,918 89,237 29,031 349,186 
Total Net Revenues Growth13,747 4,616 7,696 26,059 
Total Net Revenues Growth %6.0 %5.2 %26.5 %7.5 %
Impact of acquisitions— — (4,172)(4,172)
Impact of foreign currency translation— 7,018 2,044 9,062 
Organic Revenue Growth$13,747 $11,634 $5,568 $30,949 
Organic Revenue Growth %6.0 %13.0 %19.2 %8.9 %
Q2 2022 Organic Revenue - YTD
(in thousands, except percentages)
U.S.
International
Market Development
Total Company
Total net revenues in first two quarters of fiscal 2022$492,584 $181,054 $74,139 $747,777 
Total net revenues in first two quarters of fiscal 2021
453,388 155,743 61,864 670,995 
Total Net Revenues Growth39,196 25,311 12,275 76,782 
Total Net Revenues Growth %8.6 %16.3 %19.8 %11.4 %
Impact of acquisitions(3,926)— (6,790)(10,716)
Impact of foreign currency translation— 9,953 3,205 13,158 
Organic Revenue Growth$35,270 $35,264 $8,690 $79,224 
Organic Revenue Growth %7.8 %22.6 %14.0 %11.8 %
Sales per HubTrailing Four Quarters EndedFiscal Year Ended
(in thousands, unless otherwise stated)July 2, 2023January 1, 2023January 2, 2022
U.S.:
Revenues$1,066,427 $1,010,250 $923,129 
Non-Fresh Revenues (1)
(27,381)(38,380)(37,311)
Fresh Revenues from Insomnia Cookies and Hubs without Spokes (2)
(412,241)(404,430)(414,899)
Sales from Hubs with Spokes 626,805 567,440 470,919 
Sales per Hub (millions)4.7 4.5 4.0 
International:
Sales from Hubs with Spokes (3)
$373,482 $365,916 $332,995 
Sales per Hub (millions) (4)
9.7 9.8 8.5 
(1)Includes the exited Branded Sweet Treats business revenues.
(2)Includes Insomnia Cookies revenues and Fresh Revenues generated by Hubs without Spokes.
(3)Total International net revenues is equal to Fresh Revenues from Hubs with Spokes for that business segment.
(4)International Sales per Hub comparative data has been restated in constant currency based on current exchange rates.


Krispy Kreme, Inc.
Global Points of Access (Unaudited)
Global Points of Access (1)
Quarter EndedFiscal Year Ended
July 2, 2023July 3, 2022January 1, 2023
U.S.: (2)
Hot Light Theater Shops228 241 234 
Fresh Shops66 60 62 
Cookie Shops244 221 231 
Carts, Food Trucks, and Other (3)
— 1 — 
DFD Doors (5)
6,320 5,520 5,729 
Total6,858 6,043 6,256 
International:
Hot Light Theater Shops35 34 37 
Fresh Shops400 386 388 
Carts, Food Trucks, and Other (3)
16 2 14 
DFD Doors
3,219 3,003 3,032 
Total3,670 3,425 3,471 
Market Development: (4)
Hot Light Theater Shops120 111115
Fresh Shops939 784873
Carts, Food Trucks, and Other (3)
28 2927
DFD Doors
1,257 1,0171,095
Total2,344 1,9412,110
Total Global Points of Access (as defined)12,872 11,40911,837
Total Hot Light Theater Shops383 386386
Total Fresh Shops1,405 1,2301,323
Total Cookie Shops244 221231
Total Shops2,032 1,8371,940
Total Carts, Food Trucks, and Other44 3241
Total DFD Doors10,796 9,5409,856
Total Global Points of Access (as defined)12,872 11,40911,837
(1)Excludes the recently exited Branded Sweet Treats distribution points.
(2)Includes Points of Access that were acquired from a franchisee in the U.S. in the third quarter of fiscal 2022. These Points of Access were previously included in the Market Development segment prior to the acquisition date.
(3)Carts and Food Trucks are non-producing, mobile (typically on wheels) facilities without walls or a door where product is received from a Hot Light Theater Shop or Doughnut Factory. Other includes a vending machine. Points of Access in this category are primarily found in international locations in airports, train stations, etc.
(4)Includes locations in Japan and Canada, which are Company-owned. All remaining Points of Access in the Market Development segment relate to our franchise business.
(5)Includes over 160 McDonald’s test shops located in Louisville and Lexington, Kentucky and the surrounding area as of July 2, 2023.


Krispy Kreme, Inc.
Global Hubs (Unaudited)
Hubs
Quarter EndedFiscal Year Ended
July 2, 2023July 3, 2022January 1, 2023
U.S.:
Hot Light Theater Shops (1)
221 238 228 
Doughnut Factories4 4 4 
Total225 242 232 
Hubs with Spokes143 124 133 
Hubs without Spokes82 118 99 
International:
Hot Light Theater Shops (1)
29 26 28 
Doughnut Factories11 11 11 
Total40 37 39 
Hubs with Spokes40 37 39 
Market Development:
Hot Light Theater Shops (1)
114 108 110 
Doughnut Factories26 26 27 
Total140 134 137 
Total Hubs405 413 408 
(1)Includes only Hot Light Theater Shops and excludes Mini Theaters. A Mini Theater is a Spoke location that produces some doughnuts for itself and also receives doughnuts from another producing location.


Krispy Kreme, Inc.
Net Debt and Leverage (Unaudited)
(in thousands, except leverage ratio)
(in thousands, except leverage ratio) 
July 2, 2023January 1, 2023
Current portion of long-term debt$40,722 $40,034 
Long-term debt, less current portion814,476 739,052 
Total long-term debt, including debt issuance costs
855,198 779,086 
Add back: Debt issuance costs4,896 2,247 
Total long-term debt, excluding debt issuance costs
860,094 781,333 
Less: Cash and cash equivalents(26,635)(35,371)
Net debt$833,459 $745,962 
Adjusted EBITDA - trailing four quarters198,203 190,729 
Net leverage ratio4.2 x3.9 x