Doughnut chain Krispy Kreme announced that its profit for the third quarter grew by 34% as same store sales were higher and growth took place in franchise locations within the U.S.
However, shares at the doughnut maker fell by 10% in after hours trading to close at $22.10, as its investors focused on a muted statement over earnings for the next fiscal year.
Looking forward, Krispy Kreme said preliminary earnings for its fiscal 2015 would fall between 71 cents and 76 cents per share, which is below the estimate of 77 cents by analysts. For this current year, the company increased its bottom side of the target for profit by one penny.
Shares at Krispy Kreme often swing up and down following the release of earnings reports, due to investor reaction to any surprise to the bottom line. Revenue for the doughnut chain has been on the increase, as adding coffee and additional beverages has helped attract more customer visits. The business has also expanded its presence internationally.
For their third quarter ending November 3, Krispy Kreme announced a profit of $6.8 million, equivalent to 9 cents per share, which was up from the $5 million or 7 cents per share from one year ago.
Excluding any provisions for deferred taxes, earnings were up to 16 cents per share from 12 cents per share. Revenue was $114.2 million, which was an increase of 6.7%.
Analysts had expected 15 cents per share profits on revenue of $115 million. Same store company sales were up 3.3%. That same metric increased at franchise locations by 11% in the United States, but dropped by 3.1% overseas.
Revenue at the unit making the doughnut mixes and the equipment for doughnut making known as KK Supply Chain was up 10% to end the quarter at $58.3 million. All factory stores must purchases from this entity.
Based on the results from the third quarter and the year to date, along with other information, management did not adjust the high end of earnings, while adjusting the low end by the previously mentioned one penny.