Krispy Kreme — Second Quarter 2026 Earnings Summary

Financial Performance

• Net revenue was $331.0 million, a 12.8% decline year-over-year from $379.8 million in Q2 2025.
• GAAP net loss was $19.8 million, an improvement of $421.3 million compared to a $441.1 million loss in Q2 2025.
• Diluted loss per share was $0.12, compared to $2.55 in the prior year period.
• Adjusted EBITDA was $28.8 million, a 43.2% increase from $20.1 million in Q2 2025.
• Adjusted EBITDA margin expanded to 8.7% from 5.3% year-over-year, a 340 basis point increase.
• Year-to-date cash provided by operating activities was $10.0 million, an increase of $63.3 million compared to the first half of 2025.
• Year-to-date free cash flow was $(6.1) million, an improvement of $101.3 million compared to the first half of 2025.
• Net leverage ratio was 5.4x as of June 28, 2026, a reduction of 1.3x from the fourth quarter of 2025.
• Total available liquidity was $263.9 million, including $21.8 million in cash and cash equivalents and $242.1 million in undrawn credit facility capacity.

Guidance and Future Outlook

• The Company maintains its previously issued 2026 financial guidance.
• Full-year net revenue guidance is $1.25 billion to $1.35 billion.
• Full-year systemwide sales guidance is up 2% to 4% year-over-year in constant currency.
• The Company expects to open at least 100 shops in 2026, nearly all of which are expected to be franchised.
• Full-year Adjusted EBITDA guidance is $140 million to $150 million.
• Full-year capital expenditures guidance is $50 million to $60 million.
• Full-year free cash flow guidance is more than $15 million.
• Full-year net leverage ratio guidance is below 5.5x.

Business Segments and Product Lines

• U.S. Segment: Net revenue declined 25.0% to $172.7 million; organic revenue increased 0.1% (4.4% excluding McDonald's USA impact). Adjusted EBITDA increased 38.5% to $13.8 million with an 8.0% margin. Average revenue per door per week increased 33.2% to approximately $697.
• International Segment: Net revenue decreased 11.6% to $117.3 million, primarily due to the refranchising of Japan. Organic revenue decreased 5.1%. Adjusted EBITDA decreased 22.2% to $14.2 million with a 12.1% margin.
• Market Development Segment: Net revenue increased 142.3% to $41.0 million, driven by refranchising. Organic revenue increased 14.4%. Adjusted EBITDA increased 116.7% to $19.4 million.
• Turnaround Plan Progress: Completed refranchising of Japan and the western U.S. joint venture in March 2026. Capital expenditures decreased 70% in the first half of 2026 compared to the prior year. 59 doughnut shops opened year-to-date, nearly all franchised. Entered agreements for three new international franchise markets: Netherlands, Estonia, and Mauritius.
• Fresh Delivery: Increased fresh delivery doors by 448 in the U.S. with strategic partners during the first half of 2026.
• Logistics: Completed outsourcing of U.S. logistics in April 2026.

Market and Competitive Landscape

• Global points of access declined 13.5% to 15,665, reflecting the strategic closure of underperforming doors and the end of the McDonald's USA partnership (approx. 2,400 doors).
• Systemwide sales increased 1.1% in constant currency and 2.6% excluding the McDonald's USA partnership impact.
• Digital sales as a percent of retail sales increased to 19.8% from 17.9% year-over-year.
• Sales per hub in the U.S. increased 4.1% to $5.1 million (trailing four quarters).
• Sales per hub in International decreased 3.1% to $9.5 million (trailing four quarters).
• Approximately 42% of systemwide sales are currently generated through franchised locations, with a goal to reach approximately 50% beginning fiscal 2027.

Risks and Challenges

• The press release notes forward-looking statements subject to risks including food safety issues, cybersecurity incidents, execution of the business strategy, franchisee compliance, brand reputation, consumer spending habits, supply chain disruptions, indebtedness, raw material costs, and geopolitical tensions.
• Specific challenges mentioned include declines in the U.K. and Australia within the International segment and the impact of refranchising on segment margins.

Management Commentary and Tone

• CEO Josh Charlesworth stated the quarter highlighted "continued significant progress on our turnaround to strengthen the balance sheet, reduce leverage, and drive sustainable, profitable growth."
• Management expressed confidence in achieving 2026 financial targets and maintaining guidance.
• Results were attributed to productivity initiatives, SG&A savings, removal of McDonald's USA costs, and the success of the capital-light international franchise model.

Other Key Points

• The Company completed the refranchising of the western U.S. joint venture with WKS Restaurant Group.
• The Company is pursuing a goal of two to three international refranchising deals in 2026.
• The Company remains in compliance with all financial covenants as of June 28, 2026.
• A public conference call and webcast were hosted on August 6, 2026, to discuss results.