Krispy Kreme (NASDAQ:DNUT) said its second-quarter results reflected continued progress in its turnaround plan, with improved profitability, lower capital spending and further deleveraging offsetting the revenue impact of refranchising transactions in Japan and the Western United States.
President and Chief Executive Officer Josh Charlesworth said the company remains focused on four priorities: refranchising, improving returns on capital, expanding margins and generating sustainable, profitable U.S. growth. The company maintained its full-year 2026 guidance.
Systemwide sales totaled $497 million and increased 2.6% in constant currency after excluding the prior-year impact of the now-ended McDonald’s USA partnership. The company continues to target more than $2 billion in systemwide sales during 2026.
Profitability and Balance Sheet Progress
Adjusted EBITDA rose 43% year over year to $28.8 million, marking the company’s fourth consecutive quarter of adjusted EBITDA growth. Consolidated adjusted EBITDA margin expanded 340 basis points to 8.7%.
Duvivier attributed the improvement to productivity initiatives across the company’s network and corporate cost controls. He said the company’s U.S. logistics outsourcing has been completed, providing greater cost predictability, improved service levels and lower operational risk. While the transition is complete, he said most of the margin benefits from logistics optimization have yet to be reflected in results.
Krispy Kreme’s net leverage ratio was 5.4 times trailing four-quarter adjusted EBITDA at the end of the quarter, compared with 6.7 times at the end of 2025 and more than two turns higher in the second quarter of 2025. The company said it will continue pursuing lower leverage through net debt reduction and adjusted EBITDA growth.
Free cash flow improved by more than $100 million in the first half compared with the year-earlier period. Capital expenditures totaled $16.1 million year to date, down 70% from the first half of 2025, as the company focused investment on repairs and maintenance of its existing infrastructure.
Refranchising and International Development
The company said franchisees now account for 42% of systemwide sales, up from approximately 25% last year. Krispy Kreme aims to have franchisees generate roughly 50% of systemwide sales beginning next year through additional refranchising efforts.
Charlesworth said refranchising supports a capital-light growth model by allowing partners to invest in new development while Krispy Kreme receives royalty income. The company completed refranchising transactions in Japan and the Western U.S. this year, both of which contributed to lower net debt.
Krispy Kreme also entered agreements for new franchise markets in the Netherlands, Estonia and Mauritius, meeting its stated goal of adding three to four new international markets in 2026. The company opened 59 new shops year to date, largely in Japan, Brazil, South Korea and the Middle East. All but two were opened by franchisees, and the company remains on track to open at least 100 shops for the year.
International organic revenue declined 5.1% during the quarter, largely due to declines in the U.K. and Australia, partially offset by Canadian growth. Duvivier said the U.K. results were affected by door rationalization undertaken last year and extreme hot weather. International adjusted EBITDA declined 22% to $14.2 million, primarily due to the Japan refranchising.
U.S. Sales, Digital and Fresh Delivery
In the U.S., organic revenue increased 0.1%. Excluding the prior-year McDonald’s impact, U.S. organic revenue rose 4.4%, supported primarily by digital sales and retail shops.
The U.S. segment’s adjusted EBITDA increased 38% to $13.8 million, while adjusted EBITDA margin rose about 370 basis points to 8%. The company cited logistics outsourcing, SG&A savings and the elimination of costs associated with the McDonald’s partnership.
Krispy Kreme said it added more than 200 doors during the second quarter with partners including Walmart, Target, Kroger and Sam’s Club. During the call, management said the company had added about 450 doors year to date, on top of roughly 7,500 doors at the start of the year.
Average weekly sales per U.S. door, including both company- and franchise-operated doors, were approximately $697, up 33% from a year earlier. Charlesworth said the company is prioritizing expansion where it can maintain local production, efficient delivery routes, high store traffic and favorable merchandising.
The company said its current U.S. production network is operating at about 25% utilization, leaving capacity for additional fresh-delivery and digital growth without incremental manufacturing investment. Management said it is typically present in about 30% of the networks of its major retail partners.
Digital sales increased 8% year over year and represented approximately 22% of U.S. retail sales. Krispy Kreme’s U.S. loyalty program has nearly 18 million members, who visit about 30% more frequently than non-members, according to Charlesworth. Beginning in September, the company’s products are expected to become available on Target.com, following similar availability through Kroger.com and Walmart.com.
Guidance Maintained
Krispy Kreme reaffirmed its 2026 outlook, including net revenue of $1.25 billion to $1.35 billion, constant-currency systemwide sales growth of 2% to 4%, adjusted EBITDA of $140 million to $150 million and capital expenditures of $50 million to $60 million.
Duvivier said the fourth quarter is typically stronger seasonally than the third quarter, and the company expects higher growth and margins in the fourth quarter. He also noted that third-quarter 2025 adjusted EBITDA included a $9.3 million cyber-related insurance gain; excluding that gain, third-quarter 2025 adjusted EBITDA would have been $31.3 million.
About Krispy Kreme (NASDAQ:DNUT)
Krispy Kreme Doughnuts, Inc (NASDAQ: DNUT) is a global retailer and wholesaler renowned for its signature Original Glazed doughnut and a variety of other sweet treats. The company operates through a combination of company-owned stores, franchise outlets and strategic partnerships with supermarkets, convenience stores and other foodservice channels. In addition to its doughnut portfolio, Krispy Kreme offers freshly brewed coffee, assorted beverages and proprietary seasonal items designed to drive traffic and foster brand loyalty.
Founded in 1937 in Winston-Salem, North Carolina, by Vernon Rudolph, Krispy Kreme has grown from a single local shop to a multinational brand.
