Krispy Kreme Doughnuts Inc.'s fiscal fourth-quarter net income dropped sharply due to a one-time gain in the prior year. Its adjusted profit fell just shy of market expectations.
The doughnut store operator, based in Winston-Salem, N.C., also issued a disappointing full-year forecast and its shares slipped in after-hours trading Thursday.
Krispy Kreme reported after the market closed that it earned $4.8 million, or 7 cents per share, for the quarter that ended Feb. 3. That's compared with net income of $143.5 million, or $2.01 per share, in the same quarter of the prior year, which had a $139.6 million credit from the reversal of valuation allowances on deferred income tax assets. It earned 11 cents per share versus 6 cents per share on an adjusted basis.
The company's total revenue increased 16 percent to $118.1 million from $102 million with some help from an additional week in the most recent quarter
Krispy Kreme's revenue from stores open at least a year, on a comparable basis, increased 7.5 percent for the quarter. That is considered a key indicator of financial performance as it strips away the impact of recently opened or closed stores.
Analysts polled by FactSet, on average, were anticipating earnings of 12 cents per share on revenue of $117 million.
The company forecast adjusted earnings between 53 and 57 cents per share in its fiscal year 2014. Analysts had forecast earnings of 58 cents per share.
It said it expected continued growth in sales at its domestic stores opened at least a year but sales growth at its international franchise stores "will likely remain pressured by the substantial growth in international markets in recent years."
Krispy Kreme estimates the company and its domestic franchisees will each open about 10 stores and that its international franchisees will open 75 locations in the current fiscal year.
Shares fell 75 cents, or 5 percent, to $14.20 in after-hours trading on the news. The company's shares have traded between $5.86 and $15.33 in the past 52 weeks.
