Krispy Kreme shares not so delicious, stock plunges post earnings release

Dec. 2 (UPI) -- Krispy Kreme profits rose, but its outlook declined. Shares fell more than 13 percent in after-hours trading Monday after the company released its third-quarter earnings.

Profits grew 34 percent to $6.8 million, or 9 cents per share, up from $5 million, or 7 cents per share the year prior. Revenues rose almost 7 percent to $114.2 million.

But this compares with analyst expectations of 15 cents per share in profits. The outlook for its fiscal 2015 also fell below investor expectations, leading some to think that the share price might be too rich, rising almost 175 percent over a year.

"We are pleased to have increased our top-line at a healthy pace despite the tepid consumer spending environment," said CEO James Morgan. But the earnings growth was not strong enough to outpace investor skepticism in the year's outlook.

Investors have moved heavily on Krispy Kreme this year as earnings diverged from analyst expectations by only a few cents. Shares saw a similar fate, slipping more than 15 percent in August after the company reported worse-than-expected earnings by 2 cents. But in May, shares rose 22 percent when beating expectations by 3 cents.

Krispy Kreme has continued its international expansion, though it has had a rocky trajectory. The company is also expanding into coffee products, but still competes with Starbucks and Dunkin' Donuts, leaders in the coffee space.

[Wall Street Journal] [MarketWatch]