Krispy Kreme — Third Quarter 2026 Earnings Summary

Financial Performance

• Net revenue for the quarter ended September 27, 2026, was $328.8 million, a 12.4% decrease year-over-year (YoY) from $375.3 million, driven by refranchising deals in Japan and the western U.S.
• GAAP net loss was $13.3 million, an improvement of $6.8 million compared to a $20.1 million loss in the prior year period; diluted loss per share improved to $0.08 from $0.11.
• Adjusted EBITDA was $35.3 million, a 13.1% decrease YoY from $40.6 million; excluding a $9.3 million cybersecurity insurance recovery in the prior year period, Adjusted EBITDA increased 12.7%.
• Adjusted EBITDA margin was 10.7%, a 10 basis point (bps) decrease YoY; excluding the prior year cyber recovery, the margin increased 240 bps from 8.3% to 10.7%.
• Year-to-date cash provided by operating activities was $18.7 million, an increase of $29.8 million compared to the first three quarters of 2025.
• Year-to-date free cash flow was ($10) million, an improvement of $82 million compared to the first three quarters of 2025.
• Capital expenditures for the first three quarters of 2026 were $28.6 million (2.8% of net revenue), a 64.6% decrease from $80.8 million in the same period in 2025.
• Net leverage ratio as of September 27, 2026, was 5.5x, a 1.2x reduction from 6.7x at the end of the fourth quarter of 2025.
• Total available liquidity was $250.5 million as of September 27, 2026, comprising $30.3 million in cash and cash equivalents and $220.2 million in undrawn credit facility capacity.

Guidance and Future Outlook

• 2026 net revenue guidance increased and narrowed to $1.35 billion–$1.40 billion from a previous range of $1.25 billion–$1.35 billion.
• 2026 systemwide sales guidance is for growth of 2% to 4% YoY in constant currency, up from $1.96 billion in 2025.
• 2026 Adjusted EBITDA guidance is $140 million–$150 million, representing an increase of $25 million–$35 million YoY excluding a $14.1 million cyber recovery in 2025 and estimated $11 million from refranchised operations.
• 2026 capital expenditures guidance reduced and narrowed to $40 million–$45 million from $50 million–$60 million.
• 2026 free cash flow guidance is set at more than $15 million.
• 2026 net leverage ratio guidance is below 5.5x.
• The Company expects to open at least 100 shops in 2026, nearly all of which will be franchised.
• Management aims to reach approximately 50% of systemwide sales generated by franchisees beginning fiscal 2027.

Business Segments and Product Lines

• U.S. Segment: Net revenue declined 25.6% to $160.9 million due to refranchising; organic revenue increased 0.9% driven by fresh delivery and digital growth. Adjusted EBITDA decreased 34.0% to $13.9 million; excluding the prior year cyber recovery, Adjusted EBITDA increased $2.2 million and margin improved 320 bps.
• International Segment: Net revenue decreased 12.0% to $123.5 million due to the refranchising of Japan; organic revenue decreased 5.4%, driven by declines in the U.K. partially offset by growth in Canada. Adjusted EBITDA decreased 13.2% to $20.1 million; margin decreased 20 bps to 16.3%.
• Market Development Segment: Net revenue increased 135.3% to $44.4 million driven by refranchising impacts; organic revenue increased 14.0% due to royalty revenue growth. Adjusted EBITDA increased 54.0% to $18.5 million; margin decreased 2,190 bps to 41.6% due to mix changes.
• Refranchising: Completed refranchising of Japan and the western U.S. joint venture in March 2026. Entered a development agreement for 33 shops in the New York City metropolitan area over five years. Entered agreements for three new international markets (Estonia, Mauritius, Netherlands) and a development agreement for 120 shops in Pakistan.
• Store Growth: Opened 98 doughnut shops globally in the first three quarters of 2026, nearly all franchised. Added 715 net new doors in the U.S. fresh delivery business.
• Fresh Delivery: U.S. fresh delivery sales returned to growth; average revenue per door per week (APD) was $606, a 1.5% decrease YoY.
• Logistics: Completed outsourcing of U.S. logistics in April 2026 to increase cost predictability and reduce complexity.

Market and Competitive Landscape

• Global points of access increased 7.0% to 15,889, driven by the addition of 715 net doors in the U.S. fresh delivery business.
• Sales per hub (U.S.) increased 10.4% to $5.3 million over the trailing four quarters.
• Sales per hub (International) decreased 4.1% to $9.4 million over the trailing four quarters.
• Digital sales as a percent of retail sales increased 200 bps to 19.4%.
• Systemwide sales increased 1.0% in constant currency to $490.2 million.
• Approximately 42% of systemwide sales were generated through franchised locations in the third quarter, up from approximately 25% in fiscal 2025.

Risks and Challenges

• Forward-looking statements note risks including food safety issues, cybersecurity incidents, and execution of the turnaround plan.
• Risks include franchisee compliance, brand reputation, consumer spending habits, supply chain disruptions, and significant indebtedness.
• Geopolitical tensions, including the Iran conflict, and inflation impacting raw material and fuel costs are cited as potential risks.
• The Company remains in compliance with all financial covenants as of September 27, 2026.

Management Commentary and Tone

• CEO Josh Charlesworth stated the Company made "significant progress on our turnaround," citing growth in systemwide sales, reduced leverage, and improved free cash flow.
• Management expressed confidence in the decision to increase and narrow 2026 revenue guidance, attributing it to the success of actions driving sustainable, profitable growth.
• Management highlighted a significant expansion in Adjusted EBITDA margin of 240 bps YoY when excluding the prior year cyber insurance recovery.

Other Key Points

• The Company completed the refranchising of the western U.S. joint venture with WKS Restaurant Group and Japan.
• The Company is pursuing at least one additional international refranchising deal in 2026.
• The Company entered into a development agreement with a subsidiary of Gray Mackenzie Restaurants International to open 120 shops in Pakistan over five years, marking the fourth international franchise development agreement in 2026.
• The Company divested Insomnia Cookies Holdings, LLC, with the deconsolidation occurring in July 2024.
• Net cash provided by investing activities for the first three quarters of 2026 was $55.9 million, including $111.4 million in net proceeds from refranchising transactions.
• Net cash used for financing activities was $86.8 million for the first three quarters of 2026, primarily due to debt repayments.