Second Quarter 2026
Filed Aug 6, 2026Krispy Kreme Reports Second Quarter 2026 Financial Results, Maintains Guidance as Significant Turnaround Progress Continues
Adjusted EBITDA, Adjusted EBITDA margin, cash flow, and leverage improved, while reported net revenue declined and the U.S. and International segments reported lower revenue following refranchising, strategic door closures, and the ended McDonald’s USA partnership.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenueGAAP | $331.0 million | – | (12.8)% |
| Net lossGAAP | $(19.8) million | – | nm |
| Net loss attributable to KKIGAAP | $(20.3) million | – | nm |
| Diluted loss per shareGAAP | $(0.12) | – | $2.43 |
| Organic revenue growthnon-GAAP | (0.3)% | – | 60 bps |
| Adjusted net loss, dilutednon-GAAP | $(5.4) million | – | nm |
| Adjusted EBITDAnon-GAAP | $28.8 million | – | 43.2% |
| Adjusted EBITDA marginnon-GAAP | 8.7% | – | 340 bps |
| Adjusted EPSnon-GAAP | $(0.03) | – | $0.12 |
| Systemwide salesother | $497.3 million | – | increased 1.1% in constant currency |
| Systemwide sales excluding sales attributable to the now-ended McDonald’s USA partnershipother | – | increased 2.6% | |
| Global points of accessother | 15,665 | – | (13.5)% |
| Sales per hub (U.S.) trailing four quartersother | $5.1 | – | 4.1% |
| Sales per hub (International) trailing four quartersother | $9.5 | – | (3.1)% |
| Digital sales as a percent of retail salesother | 19.8% | – | 190 bps |
| Diluted weighted average common shares outstandingGAAP | 172.6 million | – | – |
| Year-to-date cash provided by operating activitiesGAAP | $10.0 million | – | increased $63.3 million |
| Year-to-date free cash flownon-GAAP | $(6.1) million | – | improved $101.3 million |
| Capital expenditures during the first half of 2026other | $16.1 million | – | down 70.2% |
| Capital expenditures as a percent of net revenueother | 4.9% | – | – |
| Net leverage ratioother | 5.4x | a 1.3x reduction | – |
| Total available liquidityother | $263.9 million | – | – |
| Cash and cash equivalentsGAAP | $21.8 million | – | – |
| Undrawn capacity under credit facilitiesother | $242.1 million | – | – |
| Average revenue per door per week (APD) in the U.S.other | approximately $697 | – | increased 33.2% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S.Driven by refranchising efforts associated with the turnaround plan and strategic door closures. Organic revenue increased by 0.1% year-over-year, or 4.4% excluding the impact of McDonald’s USA, reflecting strength of retail and digital channels and improved APD in fresh delivery. | $172.7 million | – | declined by 25.0% |
| InternationalDue primarily to refranchising Japan. Organic revenue decreased by 5.1%, primarily due to declines in the U.K. and Australia, partially offset by growth in Canada. | $117.3 million | – | decreased by 11.6% |
| Market DevelopmentDriven primarily by the impact of refranchising. Organic revenue increased by 14.4%, due primarily to growth in royalty revenues in the Middle East, Japan, and Brazil. | $41.0 million | – | increased by 142.3% |
| U.S. Adjusted EBITDAAdjusted EBITDA margin increased approximately 370 basis points to 8.0% as a result of turnaround plan initiatives. | $13.8 million | – | increased by 38.5% |
| International Adjusted EBITDADriven by the refranchising of Japan. Adjusted EBITDA margin decreased by 160 basis points to 12.1% due to lower Adjusted EBITDA in the U.K. and Australia and the Japan refranchising. | $14.2 million | – | decreased by 22.2% |
| Market Development Adjusted EBITDAAdjusted EBITDA margin decreased 560 basis points to 47.3%, driven by changes in the regional mix of increased lower-margin U.S. franchised sales associated with refranchising the western U.S. joint venture and Japan. | $19.4 million | – | increased by 116.7% |
2026 outlook
- Revenue$1.25 billion to $1.35 billion
- NoteSystemwide sales up 2% to 4% year-over-year in constant currency
- NoteOpen at least 100 shops, nearly all of which are expected to be franchised
- NoteAdjusted EBITDA of $140 million to $150 million
- NoteCapital expenditures of $50 million to $60 million
- NoteFree cash flow of more than $15 million
- NoteNet leverage ratio below 5.5x
What drove it
- Systemwide sales increased 1.1% in constant currency and increased 2.6% excluding sales attributable to the now-ended McDonald’s USA partnership.
- Adjusted EBITDA margin increased to 8.7% from 5.3%, due primarily to productivity initiatives, SG&A savings, and the removal of costs relating to McDonald’s USA.
- The Company completed outsourcing of U.S. logistics in April 2026.
- Fresh delivery doors increased by 448 in the U.S. with strategic partners during the first half of 2026.
- Year-to-date, 59 doughnut shops have been opened around the world, nearly all of which are franchised.
- The Company completed refranchising of Japan and the joint venture in the western U.S. in March 2026.
Concerns
- Net revenue declined 12.8%, reflecting refranchising efforts and the strategic closure of underperforming doors completed in the third quarter of 2025.
- Global points of access declined 2,448, or 13.5%, including approximately 2,400 doors attributable to the now-ended McDonald’s USA partnership.
- International organic revenue decreased by 5.1%, primarily due to declines in the U.K. and Australia.
- International Adjusted EBITDA decreased by 22.2% and International Adjusted EBITDA margin decreased by 160 basis points to 12.1%.
- Market Development Adjusted EBITDA margin decreased 560 basis points to 47.3%.
- Net leverage ratio was 5.4x.
What to watch
- Delivery against maintained 2026 net revenue guidance of $1.25 billion to $1.35 billion.
- Systemwide sales growth guidance of 2% to 4% year-over-year in constant currency.
- Progress toward Adjusted EBITDA of $140 million to $150 million and free cash flow of more than $15 million.
- Progress toward a net leverage ratio below 5.5x.
- Additional refranchising opportunities and the goal of approximately 50% of systemwide sales generated through franchisees beginning fiscal 2027.
- Execution of at least 100 shop openings, nearly all expected to be franchised.
Balance sheet and cash flow
- Year-to-date cash provided by operating activities of $10.0 million increased $63.3 million compared to the first half of 2025.
- Year-to-date free cash flow of $(6.1) million improved $101.3 million compared to the first half of 2025.
- The Company spent $16.1 million, or 4.9% of net revenue, on capital expenditures during the first half of 2026.
- Total available liquidity was $263.9 million as of June 27, 2026, including $21.8 million of cash and cash equivalents and $242.1 million of undrawn capacity under credit facilities.
- Net leverage ratio was 5.4x at the end of the second quarter of 2026, reflecting a 1.3x reduction compared to the fourth quarter of 2025.
- The Company remained in compliance with all financial covenants as of June 28, 2026.
Analysis
Krispy Kreme reported a mixed second quarter in which reported revenue contracted but profitability and cash-flow indicators improved sharply. Net revenue was $331.0 million, down 12.8%, reflecting refranchising efforts and strategic closures of underperforming doors. Organic revenue decreased by 0.3%, while systemwide sales increased 1.1% in constant currency and increased 2.6% excluding prior-year sales from the now-ended McDonald’s USA partnership.
The turnaround plan produced material margin improvement. Adjusted EBITDA increased 43.2% to $28.8 million and Adjusted EBITDA margin expanded 340 basis points to 8.7%. The company attributed the consolidated margin gain primarily to productivity initiatives, SG&A savings, and removal of costs relating to McDonald’s USA. GAAP net loss improved to $(19.8) million from $(441.1) million, while adjusted net loss improved to $(5.4) million from $(25.3) million.
Segment trends underscore the impact of the portfolio transition. U.S. revenue declined 25.0% to $172.7 million, but U.S. organic revenue rose 0.1%, or 4.4% excluding McDonald’s USA, supported by retail and digital channels and improved fresh-delivery APD. International revenue decreased 11.6% to $117.3 million because of the Japan refranchising, and its organic revenue fell 5.1% amid declines in the U.K. and Australia. Market Development revenue increased 142.3% to $41.0 million, led by refranchising and higher royalty revenues.
Capital intensity and liquidity improved during the first half. Capital expenditures were $16.1 million, down 70.2% versus $54.1 million in the first half of 2025. Year-to-date cash provided by operating activities was $10.0 million and free cash flow was $(6.1) million, with both measures improving versus the first half of 2025. Total available liquidity was $263.9 million, and the net leverage ratio was 5.4x, a 1.3x reduction compared with the fourth quarter of 2025.
Management maintained its 2026 financial outlook, including net revenue of $1.25 billion to $1.35 billion, Adjusted EBITDA of $140 million to $150 million, free cash flow of more than $15 million, and net leverage below 5.5x. The central execution items are sustaining systemwide sales growth, translating the capital-light franchise model into cash generation, completing at least 100 mostly franchised shop openings, and advancing additional refranchising while managing pressure in the International segment.
Management, verbatim
The second quarter highlighted continued significant progress on our turnaround to strengthen the balance sheet, reduce leverage, and drive sustainable, profitable growth. Demand for our fresh, iconic doughnuts across the U.S. and international markets drove systemwide sales growth of 2.6% excluding the impact of the now-ended McDonald’s USA partnership.
Josh Charlesworth, CEO
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating income or loss
- Operating expenses
- Income tax expense or benefit and tax rate
- Total debt
- Debt maturities and interest expense
- Quarterly operating cash flow
- Quarterly free cash flow
- Share repurchases
- Dividends
- Prior-quarter comparisons for reported metrics
- Prior outlook section for comparison with actual results
- Prior-year values for systemwide sales, year-to-date operating cash flow, year-to-date free cash flow, net leverage ratio, liquidity, cash and cash equivalents, and APD
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.