Krispy Kreme Outlined Its Long-Term Growth Strategy at 2022 Investor Day
Reiterated 2022 guidance and introduced 2026 Financial Targets
Krispy Kreme, Inc. (NASDAQ: DNUT) yesterday hosted an Investor Day at its Headquarters in Charlotte, NC, which was simultaneously webcast. At the event, management provided an update on the business, including the Company’s strategic vision and long-term growth goals, which included its initial 2026 outlook.
President and CEO Mike Tattersfield stated, “I am proud of the progress Krispy Kreme has made against our transformation strategy, solidifying our status as an iconic, globally loved sweet treat brand while creating significant opportunities for expansion and increased profitability. Our continued investments in building a flexible omni-channel model have driven sustainable, profitable top- and bottom-line growth, and will enable us to continue expanding in the U.S. and international markets. I am incredibly excited about the path forward for Krispy Kreme and remain confident in our ability to execute against our growth drivers and deliver value for our customers and stakeholders.”
Event Overview
During today’s event, members of Krispy Kreme’s leadership team outlined the drivers underlying its growth strategy and strategic initiatives, including:
- Capturing Opportunities Through Krispy Kreme’s Iconic Brand: As the number one sweet treat brand in the U.S., U.K., Australia, Thailand and Turkey, Krispy Kreme has enormous potential to increase its presence globally. The Company is especially focused on driving innovation through impactful Limited Time Offers and premium products, and increasing access through ecommerce, Delivered Fresh Daily (“DFD”) and its Branded Sweet Treats (“BST”) line.
- Maximizing the U.S. Hub & Spoke Opportunity: Krispy Kreme is well positioned for sustainable and profitable growth in the U.S., enabled by its transformation into a fresh omni-channel business. With the potential to grow points of access to over 15,000 in the long-term in this geography alone, the Company is focused on expanding access and purchase frequency, increasing hub & spoke productivity and driving efficiencies to earn a higher ROIC.
- Accelerating Global Expansion: Krispy Kreme is making impressive progress against its international expansion strategy and has more than doubled international point-of-access growth in the past five years. This has paved the way for continued growth, with the Company expecting to sign three to five international development deals per year. With a strong pipeline for new market growth, the Company believes it can achieve 75,000 points of access globally over the long term.
- Capitalizing on the Insomnia Cookies Global Opportunity: From the beginning of Insomnia and Krispy Kreme’s partnership in 2018, Insomnia has scaled significantly and achieved substantial margin improvement. As a result of its digital-first approach and consistent product innovation, Insomnia is uniquely positioned with a massive opportunity to expand globally.
Financial Outlook
Global President, COO and CFO Josh Charlesworth stated, “Looking ahead, I am confident in the strategic initiatives we have in place to drive growth and profitability across the business. We have laid out an ambitious plan to further maximize our hub and spoke model and expand points of access globally through high returning, capital efficient investments, enabling us to create long-term value for our shareholders.”
2022 Outlook
Krispy Kreme reiterated its full-year 2022 guidance that was provided in conjunction with its second and third quarter 2022 results.
- Net Revenue of $1.49 billion to $1.52 billion
- Organic Revenue growth of 10% to 12%
- Adjusted EBITDA of $189 million to $195 million
- Adjusted Diluted EPS of $0.29 to $0.32
- Global Points of Access of ~11,700
- Capital Expenditures of approximately 7% of revenue
- Net Leverage of approximately 3.6x
As previously disclosed, the Company expects to be near the higher end of its revenue ranges and the lower end of Adjusted EBITDA and Adjusted Diluted EPS ranges.
2023 Outlook
- 2023 Revenue growth of low double-digits in constant currency
- 2023 Adjusted EBITDA growth of low double-digits in constant currency
2026 Outlook
- Net Revenue of ~$2.15 billion
- Adjusted EBITDA of ~$315 million
- Adjusted Diluted EPS of ~$0.53
- Global Points of Access of ~18,500
- Capital Expenditures of approximately 6% of revenue
- Net Leverage of 2.0 to 2.5x
