Boston, MA 06/05/2014 (wallstreetpr) – Krispy Kreme Doughnuts (NYSE:KKD) is very famous for its hot, golden doughnuts but somehow the company got tumbled after trimming its earnings forecast. The company mentioned that lately it has seen a huge drop in its first-quarter sales where, on the other hand, the budget is mounted with expenses. And this sluggish start of-course will have an effect on the annual forecasts and the expectations lined up by the company. Not only this, where the sales are going down, the company is expecting a higher-than-expected expenses since this year they employed a new planning software which aims to keep the business on track and to analyze the data.
Main Reason For Decline
The company stated that the main reason behind the decline in the sales were severe winters. According to their analysis, heavy winter has affected both n-premises and wholesales and not on someone or two stores but throughout the company stores in the Southeast. Krispy Kreme Doughnuts (NYSE:KKD) cited that this alone has caused a decline of 1.5 percent in these company stores. Naturally, when the sales in the start of the year are so dicey, the forecast made by the company about the annual net profit and sales become highly unpromising. On top of this, the usual expenses and the expenses due to its new enterprise resource planning system software are all ready to take further toll.
Data For This Year
According to KKD, the predictions have to be re-arranged, and now they expect that the earnings this year will be 69 cents to 74 cents a share. Previously, they estimated at least 79 cents a share. So this statement by company clearly shows that KKD is going to see a gain of less than 1 percent in the first-quarter sales, and this is seriously way down their expectations! Apart from these ups and downs, Krispy Kreme Doughnuts (NYSE:KKD) also hired Thompson as its CEO from Papa John’s International Inc. where he used to serve as pizza chain chief operating officer.
