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February 17, 2004

USA: Krispy Kreme posts Q4 sales growth, provides 2005 outlook

US doughnut maker and retailer Krispy Kreme has said its business momentum and sales growth was strong in the fourth quarter, driven by increases in comparable store sales and new store openings.

US doughnut maker and retailer Krispy Kreme has said its business momentum and sales growth was strong in the fourth quarter, driven by increases in comparable store sales and new store openings.

Systemwide sales, which include sales of company and franchise stores, rose 25.6% in the fourth quarter to 1 February, compared to the year-ago period. Systemwide and company comparable store sales increased 9.1% and 10.7% respectively for the quarter.

Krispy Kreme said its sales were affected by the grocery store strikes and unseasonably warm weather early in the fourth quarter.

The company opened 35 new stores, including 31 factory stores and 4 satellites, during the quarter. In fiscal 2004, the company opened 99 stores, comprised of 86 factory stores and 13 satellites.

Krispy Kreme backed its earnings guidance of 26 cents per share for the fourth quarter, and 92 cents per share for fiscal 2004.

Chief financial officer Mike Phalen said the primary growth drivers for the company in fiscal 2005 will continue to be opening new factory stores and improving existing store productivity. He also said the company would continue to invest in its international operations.

The company said it expects diluted earnings per share of $1.16 to $1.18 for fiscal 2005 and systemwide comparable store sales growth in the mid-to-high single digits. Krispy Kreme expects to open approximately 120 new stores systemwide, including 20 to 25 satellites, in fiscal 2005.

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