Krispy Kreme: slides deeper into red

Winston-Salem / NC. (beu / kk) Last week, Krispy Kreme Doughnuts Inc. reported an unexpected second-quarter net loss of 27 million USD. It also said it would close some struggling company-owned stores, sell a manufacturing facility, cut general and administrative costs and sell more stores to franchisees in a bid to regain its financial footing. The result: Shares of Krispy Kreme slid more than 16 percent on September 10 to a lifetime low, adding to a 38 percent drop on September 07, after an analyst note said the company´s stock was still too expensive given concerns about liquidity and poorly-performing stores. J.P. Morgan analyst John Ivankoe said in a note to clients that «liquidity is now a real focus for management and investors (…) asset sales are likely now a necessity rather than a luxury». Krispy Kreme, a former Wall Street darling that went public in 2001 with a high-flying offering, has struggled since 2004 with financial restatements, investigations into its past accounting practices and a decline in doughnut sales that sent some of its franchisees into bankruptcy. The detailed press release «Krispy Kreme Releases Second Quarter Fiscal 2008 Results» is available at
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