Winston-Salem / NC. (kkd) Krispy Kreme Doughnuts Inc., since May 2016 indirect controlled member of Luxembourg’s JAB Holding Company, reported strong financial results for the third quarter ended October 3, 2021 with net revenue growing 18 percent year-over-year. Organic growth, excluding the now fully exited legacy wholesale business, was 14 percent year-over-year and 22 percent on a two-year basis. Including the exited business, organic growth was 6 percent year-over-year, in line with company expectations after lapping a strong third quarter in 2020.
Growth was driven by the performance and expansion of Krispy Kreme’s signature capital-efficient hub and spoke operating model. Global Points of Access, which reflect all locations where fresh doughnuts and cookies can be purchased, have grown 46 percent year-over-year, providing customers access to Krispy Kreme in more than 10,000 locations around the world. International Sales per Hub have grown 31 percent in the quarter year-over-year while U.S. and Canada Sales per Hub have grown 15 percent. In addition, ecommerce represented 17 percent of global retail sales in the third quarter.
Adjusted diluted Earnings Per Share was USD 0.06 in line with our expectations while GAAP diluted Loss Per Share which included IPO and acquisition related expenses was (USD 0.04). Adjusted Ebitda grew 10 percent in the quarter, driven by the strength and efficiency of the Company’s fresh doughnut hub and spoke operating model. The economies of scale from adding over 3,000 Global Points of Access in the last 12 months, as well as a successful price increase in September, are already helping to offset wage and commodity inflation, with more of an impact of the price increase to come in the fourth quarter.
Net debt decreased 40 percent to USD 681 million from the end of the second quarter as a result of proceeds from the IPO and positive free cash flow generated during the third quarter. Current net leverage is now 3.7x. Including the impact of acquiring the Krispy Kreme Canada franchise operations in the fourth quarter, the company expects net leverage to be under 3.0x in the next 12 months.
Commenting on the performance, CEO Mike Tattersfield stated, «Our third quarter results demonstrate the benefits of our omni-channel and global expansion strategy, which allow us to meet consumer demand with premium, fresh doughnuts, in a capital-efficient manner. We are seeing positive momentum continue into the seasonally strong fourth quarter, as consumers sought out our sweet treats throughout October for Halloween and are expected to do so through the holidays. In addition, our pricing power means that we are able to quickly adapt to this inflationary environment with the full impact of the pricing action we have already taken still to come in the fourth quarter.»
For additional information please read the company’s PDF file below (94 KB).20211109-KRISPY-KREME-Q3-2021