Boston, MA 09/10/2014 (wallstreetpr) – A chain of wholesale and retailer of doughnuts complementary beverages, Krispy Kreme Doughnuts (NYSE:KKD) disclosed that it has struck a deal with Monument Restaurants VII, LLC, for the development of twenty shops in Southern Maryland, Northern Virginia, Washington DC and nearby counties in the next several years.
Agreement On Ownership
Krispy Kreme Doughnuts (NYSE:KKD) said that the deal would allow Monument Restaurants to acquire ownership of its current Rockville, MD location. However, the company would retain its ownership in other locations of Northern Virginia and Washington DC, according to the company’s press statement.
The agreement allows Krispy Kreme to extend its brand presence in Washington DC and Southern Maryland area as Monument team brings in local knowledge of the key markets. Monument Restaurants also believes that the deal would take Krispy Kreme’s products more accessible to its fans in Maryland and DC.
CEO Comments on Outlook
Separately, Krispy Kreme President and Chief Executive Officer, Tony Thomson, said that the company would continue to focus on increasing its doughnut sales and guest traffic as part of its long-term strategy while expanding and improving its beverage platform, the company statement revealed.
He has also expressed his confidence that the company was on track to achieve 10% plus systemwide unit growth program for fiscal year 2015. The confidence was due to the acceleration of domestic unit growth apart from the ongoing expansion even as its same store sales were producing positive results.
Krispy Kreme has reaffirmed its full year adjusted earnings guidance of $48 – $51 million or 69 – 74 cents a share for the full year 2014. Krispy Kreme Doughnuts (NYSE:KKD) said that the forecast indicated an uptick of 12% – 21% over the last year earnings of 61 cents a share.
2Q Results
Krispy Kreme Doughnuts (NYSE:KKD) reported 23.4% jump in net income to $5.8 million from $4.7 million while earnings per share grew 14.3% to eight cents from seven cents in the year-ago quarter. However, on an adjusted basis, its net income dipped 6.3% to $9.0 million from $9.6 million and earnings per share slipped 7.1% to 13 cents from 14 cents in the prior year quarter.
Revenues advanced 6.9% to $120.5 million from $112.7 million in the previous year quarter driven by 2.8% growth in systemwide domestic sale store sales.
Results were unfavorably impacted by direct operating costs and general and administrative expenses. While direct operating costs represented 83.9% of revenues, up from 83.2%, general and administrative costs represented 5.6% of revenues, higher than 5% of revenues in the year earlier quarter.
