TLDR
- Krispy Kreme stock surged 14% to $3.71 on October 21 but remains down 65% year-to-date from 2024 highs above $12.
- Q2 2025 revenue dropped 13.5% to $379.8 million with a $441.1 million loss driven by impairment charges and McDonald’s exit costs.
- The company ended its unprofitable McDonald’s partnership in July, exiting 2,400 locations and causing a 21% U.S. revenue decline.
- Management launched a turnaround strategy focused on refranchising international markets and cutting operational costs through outsourcing.
- New locations opened in Spain, with expansion planned for Brazil and Uzbekistan as international sales grew 6% year-over-year.
Krispy Kreme shares climbed roughly 14% on October 21, closing near $3.71. The rally comes after a brutal year that saw the stock plunge 65% from levels above $12 in late 2024.
The recent bounce follows announcements about international expansion. Yet the company still faces major challenges in its home market.
Q2 2025 numbers paint a tough picture. Revenue fell 13.5% year-over-year to $379.8 million. The company posted a $441.1 million GAAP loss, with $406.9 million coming from impairment charges.
Domestic performance was particularly weak. U.S. revenue dropped 21% compared to the previous year.
The McDonald’s partnership collapse drove much of the decline. Krispy Kreme and McDonald’s USA terminated their doughnut deal on July 2, 2025. CEO Josh Charlesworth said the McDonald’s outlets weren’t profitable. The exit covered roughly 2,400 locations.
International markets tell a different story. Sales outside the U.S. grew about 6%. Canada, Japan, and Mexico showed particular strength.
Four-Point Recovery Plan
Management unveiled a turnaround strategy on August 7, 2025. The plan targets four key areas to stabilize the business.
First, refranchising company-owned markets and restructuring joint ventures. Second, improving returns on invested capital through better asset utilization.
Third, expanding margins by outsourcing U.S. logistics operations. Fourth, driving U.S. growth through high-volume, high-margin distribution channels.
Charlesworth told investors the company expects profitability to return in Q3. The strategy emphasizes “profitable U.S. expansion and capital-light international franchise growth.”
Leadership changes accompanied the new direction. Raphael Duvivier became CFO in July after serving as International President. Alison Holder took on an expanded brand role.
International Expansion Accelerates
Krispy Kreme opened its first Spanish location in Madrid on October 2. Two more Madrid shops are planned by year-end. The company targets over 50 Spanish stores within four years.
Brazil is getting two new SĂŁo Paulo outlets through a joint venture. Uzbekistan will see its first location in Tashkent this October.
The franchise model requires less capital investment. Charlesworth said these moves “strengthen our international presence” across more than 40 countries.
Morgan Stanley named Krispy Kreme the top-performing restaurant stock in Q3 with a 33% gain. However, the firm maintained its ‘Underweight’ rating with a $2.50 price target.
The average analyst price target sits around $6.45. Zacks recently moved to “strong sell” while JPMorgan maintained underweight.
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