Earnings Preview: Krispy Kreme Doughnuts

Krispy Kreme Doughnuts, Inc. (KKD) is scheduled to report its Q2 2013 results on August 22, 2012, after the bell. The Street expects EPS and revenue of $0.05 and $104.05M, respectively.

In this article, I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from KKD and the news from its closest competitors.

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KKD Profit Margin data by YCharts

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter, it reported $0.08 EPS, in-line with analyst estimates.

The consensus EPS estimate is $0.05 based on 5 analysts' estimates, down from $0.06 a year ago. Revenue estimates are $104.05M, up from $97.95M a year ago. The median target price by analysts for the stock is $9.00.

Average recommendation: Overweight

Source: Marketwatch

Latest News

• On June 28, 2012, Krispy Kreme Doughnuts Inc announced that it has completed the repurchase of common shares authorized by its Board of Directors on March 27, 2012. Pursuant to the repurchase authorization, the company purchased a total of 3,112,928 of its common shares for an aggregate purchase price of $20,000,000, inclusive of commissions, an average price of $6.42 per share.
• On June 13, 2012, Krispy Kreme Doughnuts Inc announced that it has entered into an agreement with Citymax Hotels Pvt. Ltd. for the development of 80 franchise Krispy Kreme retail shops in the next five years across the South and West regions of India.
• On May 21, 2012, Krispy Kreme Doughnuts Inc reaffirmed fiscal 2013 guidance and expects operating income (EBIT) in the range of $29 to $33 million and estimates diluted earnings per share (EPS) to be in the range of $0.21 to $0.24. According to I/B/E/S Estimates, analysts are expecting the Company to report EBIT of $33 million for fiscal 2013.
• On May 14, 2012, Krispy Kreme Doughnuts Inc announced that it has signed its first development agreement in India, a regional agreement with new franchisee Bedrock Food Company Pvt., Ltd. Under the new agreement, Bedrock Food Company is expected to open 35 stores over the next five years.
• On April 10, 2012, Krispy Kreme Doughnuts, Inc. announced that Chief Executive Officer James H. Morgan, Jr. has reassumed the role of President of the Company, effective immediately.
• On March 20, 2012, Krispy Kreme Doughnuts Inc announced that for fiscal 2013, it expects operating income (EBIT) in the range of $29 to $33 million and estimates diluted earnings per share to be in the range of $0.21 to $0.24. According to I/B/E/SEstimates, analysts are expecting the company to report EBIT of $33 million and EPS of $0.35 for fiscal 2013.

Competitors

Dunkin' Brands (DNKN), and Starbucks (SBUX) are considered major competitors for Krispy Kreme and the table below provides the key metrics for these companies and the industry.

The chart below compares the stock price changes as a percentage for the selected companies and S&P 500 index for the last one-year period.

KKD data by YCharts

Competitors' Latest Development

• On August 9, 2012, Dunkin' Brands Group Inc announced that certain of its stockholders (the Selling Stockholders) intend to offer for sale in an underwritten secondary offering approximately 21 million shares of its common stock pursuant to the company's shelf registration statement filed with the Securities and Exchange Commission.
• On July 26, 2012, Dunkin' Brands Group Inc announced that the Board of Directors declared a third quarter cash dividend of $0.15 per share, payable on August 24, 2012 to shareholders of record as of the close of business on August 6, 2012.
• On July 26, 2012, Dunkin' Brands Group Inc announced that it continues to expect revenue growth of between 7% and 8% with adjusted operating income growth of between 12% and 14%, both of which are off a 52-week year in fiscal 2011.
• On July 26, 2012, Starbucks announced that for the fourth quarter of 2012, it expects revenue growth of 10%-12% and earnings per share of $0.44-$0.45. For fiscal 2013, it expects revenue growth of 10%-13% and earnings per share of $2.04 to $2.14. According to I/B/E/S Estimates, analysts are expecting the company to report revenue of $3.45 billion and EPS of $0.48 for fourth quarter of 2012; revenue of $15.033 billion and EPS of $2.28 for fiscal 2013.
• On June 12, 2012, Dunkin' Brands Group Inc he announced that for fiscal 2012, it expects revenue growth to between 6% and 8% with operating income growth of between 10% and 12%.
• On June 12, 2012, Starbucks announced that for fiscal 2012, it is expecting earnings per share in the range of $1.80 to $1.82. For the third quarter of 2012, it expects earnings per share to be in the range of $0.44 to $0.45. For the fourth quarter of 2012, it expects EPS in the range of $0.46 to $0.47. According to I/B/E/S Estimates, analysts are expecting the company to report EPS of $1.85 for fiscal 2012; EPS of $0.46 for the third quarter of 2012; EPS of $0.48 for the fourth quarter of 2012.
• On June 7, 2012, Dunkin' Brands Group Inc announced that Neil Moses, formerly Dunkin' Brands Chief Financial Officer, is being named Chief Global Strategy Officer in recognition of his increasing focus on driving the company's strategic initiatives.
• On June 4, 2012, Starbucks Coffee Company announced that it has entered into a definitive agreement to acquire San Francisco-based Bay Bread, LLC and its La Boulange bakery brand, as well as to hire renowned French baker Pascal Rigo.
• On April 26, 2012, Dunkin' Brands Group Inc announced that its Board of Directors has approved a quarterly dividend of $0.15 per share of common stock, payable May 16, 2012, to shareholders of record at the close of business on May 7, 2012.
• On April 26, 2012, Dunkin' Brands Group Inc announced that for fiscal 2012, it is increasing its range for revenue growth to between 7% and 8% with adjusted operating income growth of between 12% and 14%. The company is increasing its range for adjusted earnings per share to $1.21 to $1.24. The company reported revenue of $628.2 million and operating profit of $270.7 million in fiscal 2011.
• On April 26, 2012, Starbucks announced that for fiscal 2012, it is raising its expectation for earnings per share to a range of $1.81 to $1.84. For the third quarter of 2012, it expects earnings per share to be in the range of $0.45 to $0.46. For the fourth quarter of 2012, it expects EPS in the range of $0.45 to $0.46. For the second half of 2012, it expects EPS growth to be approximately 25% to 29%. According to I/B/E/S Estimates, analysts are expecting the company to report EPS of $0.46 for the third quarter of 2012; EPS of $0.50 for the fourth quarter of 2012.
• On April 23, 2012, Dunkin' Brands Group Inc announced the signing of a multi-unit store development agreement with three franchise groups to develop 25 new restaurants in Texas over the next several years.
• On April 2, 2012, Dunkin' Brands Group Inc, the parent company of Dunkin' Donuts and Baskin-Robbins, the National DCP, the exclusive supply chain partner for Dunkin' Brands, and The Coca-Cola Company announced a multi-year product and marketing agreement.
• On March 30, 2012, Dunkin' Brands Group Inc announced that it has priced an upsized public offering by certain of its stockholders of 26.4 million shares of its common stock at a price of $29.50 per share.
• On March 27, 2012, BM&FBovespa (Bovespa) announced that, on April 4, 2012, the Brazilian Depositary Receipts (BDRs) Level I of Starbucks Corp will start being traded on Bovespa's over-the-counter market, quoted in BRL per unit and with standard trading lot of 100 BDRs, under the ticker SBUB11B.
• On March 21, 2012, Starbucks and Green Mountain Coffee Roasters, Inc. announced the expansion of their strategic relationship for the manufacturing, marketing, distribution and sale of Starbucks branded Vue packs for use in GMCR's recently introduced Keurig Vue Brewer.
• On March 6, 2012, Dunkin Brands Group Inc announced that its Board of Directors has approved the initiation of a cash dividend to shareholders. The quarterly dividend of $0.15 per share will be paid on March 28, 2012, to shareholders of record on the close of business on March 19, 2012.

Technical Overview

The stock has a market capitalization of $431.50M and is currently trading at $6.48 with a 52-week range of $5.78-$9.47. The stock's year-to-date performance has been -0.92%. It is currently trading above 20 and 50 SMA, but below 200 SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.