Krispy Kreme Reports Fourth Quarter and Full Year 2025 Financial Results Demonstrating Meaningful Progress on Turnaround

Strengthens balance sheet while increasing adjusted EBITDA and margin in the fourth quarter of 2025

Krispy Kreme, Inc. (NASDAQ:DNUT) ("Krispy Kreme", "KKI", or the "Company") today reported financial results for the fourth quarter and full year ended December 28, 2025.

Fourth Quarter Highlights (vs Q4 2024)

• Net revenue of $392.4 million
• Organic revenue decreased 3.9%, reflecting the strategic closure of underperforming doors
• GAAP net loss of $29.1 million
• Adjusted EBITDA of $55.6 million
• Cash provided by operating activities of $45.0 million, free cash flow of $27.9 million

Full Year Highlights (vs FY 2024)

• Net revenue of $1,522.6 million
• Systemwide Sales of $1.96 billion, up 0.7% in constant currency
• Organic revenue decreased 1.3%
• GAAP net loss of $523.8 million
• Adjusted EBITDA of $140.3 million
• Cash provided by operating activities of $33.9 million, free cash flow of $(64.0) million
• Global Points of Access decreased 2,363, or 13.5% to 15,194 reflecting the strategic closure of underperforming doors

"During the fourth quarter, we demonstrated meaningful progress on our turnaround, unlocking strong consumer demand for Krispy Kreme's iconic, fresh doughnuts through our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth. Although our decision to exit underperforming U.S. doors resulted in a modest decline in net revenue, we expanded adjusted EBITDA margin 280 basis points year-over-year. In addition, we reduced our financial leverage quarter-over-quarter, delivered positive free cash flow, and secured a strategic refranchising agreement for our operations in Japan."

"We are pleased to have ended 2025 with positive momentum, driven by quality growth in the U.S. with key strategic partners, higher digital sales, and international expansion. In 2026, we look forward to building on this momentum through systemwide sales growth, additional refranchising activity, disciplined capital expenditures, lower net leverage, and positive free cash flow generation," said Krispy Kreme CEO Josh Charlesworth.

Turnaround Plan

The Company's comprehensive turnaround plan is designed to deleverage the balance sheet and deliver sustainable, profitable growth through a focus on the following four components:

1. Refranchising: Improve financial flexibility through refranchising international markets and restructuring the joint venture in the Western U.S.
2. Improving Return on Invested Capital: Reduce capital intensity by using existing assets and focusing on franchise development.
3. Expanding Margins: Expand margins through greater operational efficiency, including outsourcing U.S. logistics.
4. Driving Sustainable, Profitable Growth: Pursue U.S. growth based upon sustainable and profitable revenue streams.

Fourth Quarter 2025 Consolidated Results (vs Q4 2024)

Krispy Kreme's results reflect continued progress in improving U.S. profitability and wider adoption of the capital-light international franchise model. Net revenue was $392.4 million in the fourth quarter of 2025, a decline of 2.9% or $11.6 million.

Organic revenue decreased by 3.9%, primarily driven by a Global Points of Access decline of 2,363, or 13.5%, reflecting the strategic closure of underperforming doors which was completed earlier in the year.

GAAP net loss was $29.1 million, compared to the prior year fourth quarter net loss of $22.2 million. GAAP loss per share, diluted was $0.17, compared to loss per share, diluted of $0.13 in the prior year fourth quarter.

Adjusted EBITDA increased 21.0% to $55.6 million. Adjusted EBITDA margin increased to 14.2% from 11.4%, positively impacted by productivity initiatives, SG&A savings, and the removal of costs from the now-ended McDonald's USA partnership, and business interruption insurance recoveries of $4.8 million related to losses incurred in the fourth quarter of 2024 and the first quarter of 2025 due to the Company's 2024 cybersecurity incident.

Adjusted net income, diluted, was $15.0 million, up from $1.2 million compared to the prior year fourth quarter, and adjusted earnings per share, diluted were $0.09 compared to $0.01 in the prior year fourth quarter.

Full Year 2025 Consolidated Results (vs FY 2024)

Krispy Kreme's full year results reflect the sale of a majority ownership stake of Insomnia Cookies, as net revenue declined 8.6% to $1.5 billion in 2025, compared to $1.7 billion in the prior year.

Organic revenue decreased by 1.3%, primarily driven by a Global Points of Access decline of 2,363, or 13.5%, reflecting the strategic closure of underperforming doors which was completed earlier in the year.

GAAP net loss was $523.8 million, compared to net income of $3.8 million. GAAP loss per share, diluted was $3.02 compared to earnings per share, diluted of $0.02.

Adjusted EBITDA declined 27.5% to $140.3 million, primarily linked to the sale of a majority ownership stake of Insomnia Cookies and termination of the Business Relationship Agreement with McDonald's USA. As previously disclosed, in the third quarter of 2025, Krispy Kreme and McDonald's USA jointly decided to terminate their Business Relationship Agreement, effective July 2, 2025. Adjusted net loss, diluted declined to $17.7 million from adjusted net income of $19.2 million in the prior year. Adjusted loss per share, diluted declined to $0.10 from adjusted earnings per share, diluted of $0.11 in the prior year.

Diluted weighted average common shares outstanding for the full year 2025 were 170.9 million, compared to 171.5 million for the full year 2024.

Fourth Quarter 2025 Segment Results (vs Q4 2024 unless otherwise stated)

U.S.: In the U.S. segment, net revenue declined by $14.9 million to $230.2 million, or 6.1%, primarily due to strategic door closures, which led to an organic revenue decline of 5.8%. Average revenue per door per week ("APD") increased year-over-year 4.5% and quarter-over-quarter 7.0% to $660, primarily driven by the exit of lower volume, unprofitable doors.

U.S. Adjusted EBITDA increased by $9.2 million to $32.8 million, or 39.1%, partially aided by the timing of cybersecurity-related insurance recoveries of $4.8 million. Excluding cybersecurity insurance recoveries, U.S. Adjusted EBITDA increased by $4.4 million compared to the prior year fourth quarter and increased $7.0 million compared to the third quarter of 2025. The year-over-year and sequential improvements in Adjusted EBITDA demonstrated meaningful improvement resulting from the turnaround plan initiatives.

International: In the International segment, net revenue grew by $4.1 million, or 2.9%, with a foreign currency translation benefit of $4.5 million. International organic revenue declined by 0.3%. Points of Access declined by 6.7% due to strategic door closures in Japan and Mexico to optimize the Company's fresh delivery network.

International segment Adjusted EBITDA increased by $1.1 million, or 4.1%, to $26.8 million driven by revenue growth in Japan and Mexico. The margin increase of 20 basis points to 18.8% was due to improvements in Japan and Mexico.

Market Development: In the Market Development segment, net revenue declined by $0.8 million to $19.7 million, or 4.0%. Market Development organic revenue declined by 4.9%, as growth in royalty revenue from international markets including the Middle East, India, and South Korea and contributions from newer markets such as Brazil and Spain, was more than offset by lower equipment sales in the quarter.

Market Development Adjusted EBITDA increased by $0.2 million, or 2.1% to $12.1 million with a margin of 61.5%, up 370 basis points, mainly due to changes in revenue mix.

Balance Sheet and Capital Expenditures

During full year 2025, the Company invested $97.9 million, or 6.4% of net revenue, in capital expenditures, primarily in the U.S. to support previously committed initiatives aimed at bringing doughnuts closer to consumers through nationwide expansion. This includes a Hot Light Theater Shop and production hub in Minneapolis, MN that opened in November 2025. Overall, the Company has reduced investment in building new hubs in favor of leveraging existing excess capacity for growth where available.

As of the end of fiscal 2025, the Company's net leverage ratio was 6.7x, reflecting a 0.6x reduction compared to the third quarter of 2025. The Company has total available liquidity of $207.4 million, which includes $42.4 million of cash and cash equivalents as well as undrawn committed capacity of $165.0 million under its credit facilities. The Company was in compliance with all financial covenants as of December 28, 2025.

Refranchising

In December 2025, the Company announced that it reached an agreement for Unison Capital, Inc. to purchase its operations in Japan. The transaction is projected to close in the first quarter of 2026, with cash proceeds estimated at approximately $65 million. The Company intends to refranchise certain other international markets.

The Company also plans to restructure its long‑standing Western U.S. joint venture with WKS Restaurant Group ("WKS"), which represents approximately 15% of U.S. revenue. The Company expects to reduce its ownership to a minority position while adding current company-owned shops to the joint venture.

These efforts are expected to provide the Company with greater financial flexibility and enable debt paydown.

For fiscal 2025, approximately 75% of the Company's systemwide sales came from company-operated locations. Through refranchising efforts, Krispy Kreme expects nearly 50% of systemwide sales to be generated by franchisees beginning fiscal 2027.

2026 Financial Outlook

The Company is providing the following annual financial guidance and intends to provide further detail as its refranchising plans progress.

• Systemwide Sales up 2% to 4% in constant currency from $1.96 billion in 2025
• Open at least 100 shops globally, having ended 2025 with 2,125 shops
• Capital expenditures of $50 million to $60 million
• Positive free cash flow
• Net leverage ratio at or below 5.5x

Definitions

The following definitions apply to terms used throughout this press release:

• Systemwide Sales: Reflects global sales of all Krispy Kreme products, whether operated by the Company or franchisees, excluding mix, equipment, and royalty revenue. Sales from franchisees are reported to the Company by such franchisees and are not included in Company revenues. Growth in Systemwide Sales represents the change in one period from the same period in the prior year on a constant currency basis. The Company believes Systemwide Sales information is important because it is indicative of the health of the Company's brand and aids in understanding the Company's financial performance.
• Global Points of Access: Reflects all locations at which fresh doughnuts can be purchased. We define Global Points of Access to include all Hot Light Theater Shops, Fresh Shops, Carts and Food Trucks, fresh delivery doors (which includes Krispy Kreme branded cabinets and merchandising units within high traffic grocery and convenience stores, quick service or fast casual restaurants ("QSR"), club memberships, and drug stores) and Cookie Bakeries (through the date of the Insomnia Cookies deconsolidation in fiscal 2024), and other points at which fresh doughnuts can be purchased at both Company-owned and franchise locations as of the end of the applicable 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 and by asset type.
• 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 applicable reporting period.
• Hubs with Spokes: Reflects Hubs currently producing product for other Fresh Shops, Carts and Food Trucks, or fresh delivery doors, and excludes Hubs not currently producing product for other shops, Carts and Food Trucks, or fresh delivery doors.
• 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 each of the five most recent quarters.
• Fresh Revenues from Hubs with Spokes: Fresh Revenues is a measure focused on the Krispy Kreme doughnut business and includes product sales generated from our Hot Light Theater Shops, Fresh Shops, Carts and Food Trucks, fresh delivery doors, and digital channels and excludes sales from Cookie Bakeries and Branded Sweet Treats (through the date of the Insomnia cookies deconsolidation and Branded Sweet Treats exit, respectively). Fresh Revenues from Hubs with Spokes equals the Fresh Revenues derived from Hubs with Spokes.
• 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 and webcast at 8:30 AM Eastern Time today to discuss its results for the fourth quarter and full year 2025. A slide presentation will be available prior to the start time on the investor relations section of the Company's website at investors.krispykreme.com.

To register for the conference call, please use this LINK. After registering, confirmation will be sent through email, including dial-in details and unique conference call codes for entry. To listen to the live webcast and Q&A, visit the Krispy Kreme investor relations website at investors.krispykreme.com. A replay of the webcast will be available on the website within 24 hours after the call. This earnings press release and related materials will also be available on the investor relations section of the Company's website.

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 more than 40 countries through its unique network of fresh doughnut shops, partnerships with leading retailers, and a rapidly growing digital business. 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.X.com/KrispyKreme.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by use of forward-looking terminology, including terms such as "plan," "believe," "may," "continue," "guidance," "outlook," "could," "will," "should," "would," "anticipate," "estimate," "expect," "intend," "objective," "seek," "pursue," "strive," "look forward," or the negatives of these words, comparable terminology, or other references to future periods; however, statements may be forward-looking whether or not these terms or their negatives are used. Forward-looking statements are not 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 in this press release. We consider the assumptions and estimates on which forward-looking statements are based to be reasonable, but they are subject to various risks and uncertainties relating to our operations, financial results, financial conditions, business, prospects, future plans and strategies, projections, liquidity, the economy, and other future conditions. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors could cause our actual results to differ materially from those contained in forward-looking statements including, without limitation: food safety issues, including risks of food-borne illnesses, tampering, contamination, and cross-contamination; impacts from any material failure, inadequacy, or interruption of our information technology systems, including breaches or failures of such systems or other cybersecurity or data security-related incidents; our ability to execute our business strategy, including our turnaround plan and growth through international development with strategic partners and profitable expansion of our fresh delivery and digital channels; our ability to realize the anticipated benefits from past or potential future strategic transactions (including refranchising); failure by our franchisees, subfranchisees, or third-party service providers to operate effectively and in compliance with our standards and applicable law; any harm to our reputation or brand image; negative impacts on our business due to changes in consumer spending habits, consumer preferences, or demographic trends; our ability to open new and maintain existing shops and points of access both domestically and internationally; disruptions to our and our franchisees' supply chain, including the loss of or failure to perform by single-source or limited suppliers, vendors, distributors, or manufacturers; our significant indebtedness and our ability to meet the financial and other covenants under our credit facilities; changes in the cost of raw materials and other commodities, including due to import and export requirements (including tariffs), inflation, or foreign exchange rates; our ability to recruit and retain key personnel; adverse regulatory actions or publicity concerning food or occupational safety, food quality, health, and other issues or regulatory investigations, enforcement actions, or material litigation; and other risks and uncertainties described under the heading "Risk Factors" and elsewhere in our Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the "SEC") and in other filings the Company makes from time to time with the SEC. These forward-looking statements are made only as of the date of this document, and we undertake no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future events, or otherwise, except as may be required by law.

Key Performance Indicators and Non-GAAP Measures

This press release includes certain financial information that is not presented in conformity with accounting principles generally accepted in the U.S. ("GAAP"). These non-GAAP and operating measures include organic revenue (decline)/growth, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted Net Income/(Loss), Diluted, Adjusted EPS, Free Cash Flow, Net Debt, Fresh Revenue from Hubs with Spokes, Sales per Hub and Systemwide Sales. We believe these non-GAAP and operating measures are useful in evaluating our operating performance. Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying business, and they are consistent with how business performance is planned, reported and assessed internally by management and the Company's Board of Directors. We monitor the key business metrics and non-GAAP metrics set forth herein to help us evaluate our business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. These non-GAAP and operating measures are not standardized, and it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names, 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, the non-GAAP financial measures are not measurements of financial performance under GAAP or a substitute for results reported under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, we urge you to review our non-GAAP financial measures in conjunction with our historical consolidated financial statements and notes thereto filed with the SEC and not to rely on any single financial measure.

See "Reconciliation of Non-GAAP Financial Measures" below for a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure.

Krispy Kreme, Inc.

Reconciliation of Non-GAAP Financial Measures

(unaudited and in thousands, except per share amounts)

We define "Adjusted EBITDA" as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, and certain other non-recurring, infrequent or non-core income and expense items. Adjusted EBITDA, both on a consolidated and at the segment level, is a principal metric that management uses to monitor and evaluate operating performance and provides a consistent benchmark for comparison across reporting periods. "Adjusted EBITDA margin" reflects Adjusted EBITDA as a percentage of net revenues.

We define "Adjusted EBIT" as earnings before interest expense, net and income tax expense, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, and certain other non-recurring, infrequent or non-core income and expense items. Adjusted EBIT is a metric complementary to Adjusted EBITDA that takes into account depreciation expense and amortization of right of use assets, allowing management to have a view of performance when including amortized costs from capital investments and lease obligations.

We define "Adjusted Net Income/(Loss), Diluted" as net (loss)/income attributable to common shareholders, adjusted for interest expense, share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, the tax impact of adjustments, and certain other non-recurring, infrequent or non-core income and expense items. "Adjusted EPS" is Adjusted Net Income/(Loss), Diluted converted to a per share amount.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBIT, Adjusted Net Income/(Loss), Diluted, and Adjusted EPS have certain limitations, including adjustments for income and expense items that are required by GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses that are the same as or similar to some of the adjustments in this presentation, such as share-based compensation. Our presentation of these non-GAAP measures should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using these non-GAAP measures supplementally.