New Filling For Krispy Kreme

Forbes:

Krispy Kreme is going for a whole new flavor that has a dash more substance to it and quite a few less frills, said new Chief Executive James Morgan at the company’s annual shareholders meeting as he reminisced about buying glazed donuts with his weekly allowance as a child.

Morgan called for caution from investors despite the company reporting a profit about a week earlier. The donut maker reported income of $4.0 million, or 6 cents a share, as compared with a loss of $7.4 million, or 12 cents a share. The company had revenues of $103.6 million, down from $110.9 million in the year-prior period. Same-store sales were up 1.2%. Analysts surveyed by Thomson Financial had expected earnings of 8 cents per share. The stock of the company dropped 7.5% to $3.42 the day the results were announced.

Morgan said the company will not start to “gain meaningful traction for another 12 to 24 months,” blaming the uneven performance on agricultural commodities and gas prices. The fuel prices are affecting the cost of delivery the donuts to stores and have been passed on to customers.