Shares of Krispy Kreme rallied sharply after the company reported fourth-quarter results that signalled strengthening profitability and operational progress under its ongoing turnaround plan.
For the quarter ended December 28, 2025, the doughnut chain posted revenue of $392.4 million, down 2.9% year over year, reflecting the impact of store closures and portfolio optimization initiatives. Despite the decline in top-line sales, the company exceeded analyst expectations on earnings, boosting investor confidence.
Adjusted earnings per share came in at $0.09, ahead of forecasts, while adjusted EBITDA rose more than 20% to approximately $55.6 million, with margins expanding by nearly 280 basis points compared with the prior year period.
“Our fourth quarter results demonstrate meaningful progress in our turnaround,” said CEO Josh Charlesworth. “We are unlocking strong consumer demand through profitable U.S. expansion and capital-light international franchise growth.”
Strategic Reset Driving Performance
The latest quarter reflects a deliberate shift in strategy. Krispy Kreme has been closing lower-performing shops and reallocating resources toward high-volume retail partnerships and franchise expansion. The company continues to scale distribution through major retail partners and expand its asset-light franchise footprint internationally.
Digital engagement also remains a growth lever, with the brand’s loyalty program surpassing 17 million members globally, supporting repeat purchases and omnichannel sales growth.
In addition, Krispy Kreme is pursuing strategic refranchising initiatives, including the planned sale of its Japan business, aimed at strengthening the balance sheet and funding expansion.
Franchise Growth in Focus
For franchise stakeholders, the renewed emphasis on capital-light international growth signals fresh opportunity. Management reaffirmed expectations of returning to positive systemwide sales growth in 2026 and outlined plans to open at least 100 new shops globally.
The market responded positively, sending shares up by double digits in early trading following the earnings release, one of the stock’s strongest single-day moves in recent years.
While revenue pressures persist amid portfolio restructuring, the latest results suggest Krispy Kreme’s turnaround strategy is beginning to gain traction, with profitability and franchise-led expansion emerging as central pillars of its next growth phase.
