Krispy Kreme Doughnuts (NYSE:KKD) announced that earnings during its fiscal first-quarter plunged 34% to $6.03 million, down from $9.17 million during the same time last year. Adjusted EPS for the quarter was 14 cents, which topped Wall Street’s prediction of 8 cents, Reuters said.
Investors were happy with the results, sending Krispy Kreme share up more than 11% in Monday midday trading.
Company sales rose 3.7% to $108.5 million. That fell short of analysts’ estimates of $111 million in sales.
The company attributed the earnings drop to unfavorable tax rates. Krispy Kreme has kept ahead of a renewed public focus on healthier foods by adding popular beverages including coffee to its donut shops.
Company-owned stores saw sales rise 2.1% during the quarter. Sales at international franchise stores fell 7.9%, while U.S. franchise outlet sales were up 5.8% compared to last year. The company’s operating margin increased to 10% from 9.4%.
Krispy Kreme reiterated its previously announced estimates for the full year.