Focus: Q3 2025 U.S. Earnings Reports Krispy Kreme, Inc. CEO Josh Charlesworth announced the company is restructuring its distribution network, prioritizing sales through major retailers like Walmart and Costco. This move follows the termination of its partnership with McDonald's.
The 88-year-old doughnut brand reduced its global points of distribution by over 6% in Q3. Charlesworth emphasized the company's focus on profitable growth, phasing out underperforming sales channels.
"We've exited certain partnerships while actively expanding with high-traffic retailers offering better visibility and terms," Charlesworth stated in an interview.
Shares rose 6.1% to $3.96 in premarket trading.
Krispy Kreme ended sales at approximately 2,400 U.S. McDonald's locations in Q3. The burger chain had initially partnered with Krispy Kreme in late 2022, but the collaboration led to increased costs and operational challenges, prompting termination last summer.
The North Carolina-based company is now redirecting resources toward partnerships with Costco, Walmart, and Target. Currently, Krispy Kreme products are available in only one-third of Walmart stores, indicating significant expansion potential.
"Consumers love our products when they see them," Charlesworth noted. "But first, they need to see them."
As part of its transformation, Krispy Kreme is implementing cost-cutting measures, outsourcing daily delivery logistics, and exploring automation and AI to optimize scheduling and routing.
For Q3, Krispy Kreme reported a net loss of $19.4 million ($0.11 per share), compared to a net profit of $39.6 million ($0.23 per share) in the prior-year period. The 2024 results included an $87.1 million one-time gain from selling its majority stake in Insomnia Cookies.
Adjusted EPS was $0.01, beating analysts' expectations of a $0.05 loss. Revenue declined 1.2% to $375.3 million, slightly below the $378.3 million consensus. Excluding the Insomnia Cookies divestiture impact, organic revenue grew 0.5%, driven by international expansion.
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