Krispy Kreme went from an obscure regional brand to the hot growth stock of 2003 to a scandal-ridden mess. Now, the doughnut maker is writing a new chapter, largely out of Wall Street’s eye: a profitable and growing restaurant company.
In its most recent quarter, the company posted its biggest profit in six years and is on track to report positive full-year net income this year for the first time since 2004. After years of closing locations, Krispy Kreme will actually expand its store base in 2010. At one point earlier this year, the stock was up 75 per cent from 2009-end levels; a retreat has left it up just 27 per cent.
It’s a pleasant batch of news for a company that has toiled in profitless obscurity since it was knocked off its perch as a Wall Street high flier.
Charmed by the cult-like queues at brand-new Krispy Kreme locations, investors bid up the stock eightfold in the first two years after its 2000 IPO. In a Fortune magazine cover story called “How Krispy Kreme became America’s hottest brand,” writer Andy Serwer said, “No, it’s not as recognizable as Coke or McDonald’s – yet.”
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