Krispy Kreme (KKD) stock suffered a significant drop after its Q1 earnings report saw lower than expected profit and revenue — forcing the company to lower its full-year guidance.
KKD stock is down 13.5% in morning trading.
KKD pulled in $121.6 million in revenue for Q1, 0.8% up from last year but missing analyst expectations of $126.5 million.
On an unadjusted basis, net income was $9.7 million (14 cents per share), up from $8 million from the year-ago period. Adjusted KKD earnings were up 12% to $15.8 million, or 23 cents per share, which was 1 cent below the Street consensus.
Krispy Kreme chairman James Morgan blamed a tough winter for the results.
”Severe winter weather adversely affected both on-premises and wholesale sales throughout our company store base in the Southeast, and contributed to a 1.5% decline in same store sales at company shops against a very tough 12.2% same store sales gain in the first quarter last year,” Morgan said. “Our domestic franchisees, however, who were less affected by weather, posted a gain in same store sales of 4.5% on top of an 11.8% rise in the first quarter last year.”
The biggest worry moving forward, however, is not the cool sales, but KKD’s outlook for the year.
Krispy Kreme lowered its earnings outlook for the full year to a range of $48 million-$51 million from $51 million-$55 million, blaming several factors including compensation, new technology and an “unfavorable variance to expected results in the first quarter.
KKD shares are down 14% year-to-date.