Winston-Salem, North Carolina-based fastfood chain Krispy Kreme Doughnuts has posted net income of US$8.9m for its Q1 (fiscal 2003) ended 5 May 2002, up 54.9% from US$5.7m year on year.

Diluted earnings per share increased to US$0.15 in the Q1, from US$0.10 for the Q1 2002.

Systemwide sales, including sales of company and franchise stores, increased 30.4% to US$183.1m in the Q1, from US$140.4m in the Q1 2002. Sales were driven by an increase in company store sales of 22.2% to US$74.2m and an increase in franchise store sales of 36.7% to US$108.9m. On a comparable store basis, systemwide store sales increased 12.9% and company store sales were up 10.5%.

Total company revenues, which include sales from company stores, franchise operations, and Krispy Kreme Manufacturing and Distribution (KKM&D), rose 26.3% to US$111.1m, compared with US$87.9m year on year. Sales from the company stores increased 22.2% to US$74.2m; revenues from franchise operations grew to US$4.3m, up 42.0%; and KKM&D sales increased 34.6% to US$32.6m.

Scott Livengood, chairman, president and CEO, said: “Our Q1 results provide us with a strong start for FY 2003. We achieved strong results across all major sales channels and across our store network. A focused execution of our growth strategy – which is to open stores, establish strong relationships with our customers and communities, and gain greater market penetration through multiple channels of sales – has generated results in excess of our previous projections for the quarter.”

During the Q1, six new Krispy Kreme stores were opened and two were closed. This brings the total number of stores at the end of the Q1 to 222. The factory store, which opened in Maple Grove, MN, just outside of Minneapolis, set a new opening week sales record of US$480,693.

Based on its Q1 performance, the company expects to earn US$0.63 per fully diluted share or US$0.01 above consensus for FY 2003. Quarterly earnings guidance is as follows: Q2-US$0.14; Q3-US$0.16; Q4-US$0.18. Krispy Kreme anticipates systemwide comparable store sales of 10% for the year and Q2 expectations of 10%. Additionally, the company anticipates opening 62 stores in 15 new markets, up three stores on previous guidance. Finally, the company expects to sign at least two franchise agreements for the development of international markets in FY 2003.