North Carolina-based Krispy Kreme Doughnuts has reported financial results for the 14-week Q4 and 53-week FY ended 3 February 2002.
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Systemwide sales, including sales of both company and franchise stores, increased 46.3% to US$182.6m in the Q4, compared with US$124.8m in Q4 2001. Sales were driven by an increase in company store sales of 31.9% to US$75.4m and an increase in franchise store sales of 58.4% to US$107.2m. On a comparable store basis, systemwide store sales for the comparable 13-week period versus a year ago were up 13.1% and company comparable store sales increased 10.7%.
Total company revenues, which include sales from company stores, franchise operations, and Krispy Kreme Manufacturing and Distribution (KKM&D), rose 43.0% to US$117.1m in the Q4, compared with US$81.9m in the Q4 2001. Sales from company stores increased 31.9% to US$75.4m; revenues from franchise operations were up 61.5% to US$4.4m; and KKM&D sales increased 69.3% to US$37.3m.
Net income for the Q4 was US$8.3m, an increase of 94.2% compared with US$4.3m in the Q4 last year. Diluted earnings per share increased to US$.14 in the Q4 of fiscal 2002 from $.08 per share in the prior year comparable period. The company has estimated that the 14th week impacted earnings with about US$.01 per share. On this basis, a comparable 13-week Q4 fiscal 2002 earnings growth rate versus the same 13-weeks a year ago would be 73.3% rather than the 86.7% indicated by the unadjusted comparison.
For FY 2002, systemwide sales increased 38.7% to US$621.7m from US$448.1m for the fiscal year ended 28 January 2001. This is a result of an increase in company store sales of 24.6% to US$266.2m and an increase in franchise store sales of 51.6% to US$355.5m.
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By GlobalDataTotal company revenues rose 31.1% to US$394.4m for the year compared with US$300.7m in the prior year. Sales from company stores increased 24.6% to US$266.2m; revenues from franchise operations were up 48.3% to US$14m; and KKM&D sales increased 47.1% to US$114.1m.
Net income for the fiscal year was US$26.4m, an increase of 79.1% compared with US$14.7m a year ago. Diluted earnings per share increased to US$.45 for the year from US$.27 per share in the prior year.
Scott Livengood, chairman, president and CEO, said: “The momentum generated by new store openings and growth across all sales channels combined with the potential benefits of our new coffee and expanded beverage program, our new hot doughnut technology and the company’s international growth prospects give me great confidence for this year and for years to come.”
During the Q4, 21 new Krispy Kreme stores were opened and one store was closed. New markets entered included Seattle, WA, Milwaukee, WI, Wichita, KS, Reno, NV, Norman, OK, and Toronto, Ontario in Canada while 11 markets gained additional locations, bringing the total number of stores at 3 February 2002 to 218.
Three doughnut and coffee shops (stores featuring the new hot doughnut technology) were also opened during the quarter and are not included in store count. Since the end of the quarter, Krispy Kreme has opened one additional franchise store and closed two franchise stores.
Krispy Kreme also provided guidance for fiscal 2003. Total diluted earnings per share for fiscal 2003 is expected to be US$.62, above consensus by US$.01. The company indicated quarterly earnings guidance as follows: Q1 – US$.14; Q2 – US$.14; Q3 – US$.16; Q4 – US$.18.
Regarding comparable store sales, the company anticipates an average of 10% for the year with Q1 expectations of systemwide comparable store sales of 10%. Additionally, the company anticipates opening 59 new stores in 15 new markets. Finally, the company indicated that it expects to sign at least two franchise agreements for development of international markets in fiscal 2003.
