Krispy Kreme shares spike as McDonald’s deal sweetens growth prospects
Though its shares have drifted 20% lower over the past five years, Krispy Kreme (DNUT:NASDAQ) spiked on news (26 March) the sweet treat brand is expanding its partnership with burger chain behemoth McDonald’s (MCD:NYSE).
This follows a successful test at 160 McDonald’s restaurants in Kentucky where ‘consumer excitement and demand exceeded expectations’, according to Krispy Kreme. The phased rollout of the programme will begin in the second half of this year, with nationwide availability at participating restaurants expected by the end of 2026.
As part of the agreement, Krispy Kreme won’t supply its melt-in-your-mouth doughnuts to any other US quick service restaurant besides the ‘Golden Arches’. On 13 February 2024, Krispy Kreme reported tasty 13.2% fourth quarter organic sales growth to $446 million, taking full year organic revenue growth to a forecast-beating 12.2%. CEO Josh Charlesworth said the growth was driven by ‘strong consumer demand in all sales channels and increased access to our fresh doughnuts around the world. We improved profitability as we grew, showing the productivity benefits of our unique Hub and Spoke operating model’, this lets Krispy Kreme make and distribute treats efficiently with production hubs, either stores or doughnut factories, distributing its freshly-made doughnuts daily to retailers, grocers and gas stations.
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