Krispy Kreme Q2 2025 Earnings Report

Krispy Kreme EPS Results

• Actual EPS: -$0.15
• Consensus EPS: -$0.05
• Beat/Miss: Missed by -$0.10
• One Year Ago EPS: $0.05

Krispy Kreme Revenue Results

• Actual Revenue: $379.77 million
• Expected Revenue: $382.25 million
• Beat/Miss: Missed by -$2.48 million
• YoY Revenue Growth: -13.50%

Krispy Kreme Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 8:30AM ET

Krispy Kreme (NASDAQ:DNUT), together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.

Krispy Kreme Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company unveiled a comprehensive turnaround plan targeting profitable US expansion and capital-light international franchise growth through refranchising, improved returns on capital, expanded margins, and sustainable US growth.
• Positive Sentiment: In the US, Krispy Kreme ended its McDonald’s partnership, closed about 1,500 underperforming fresh delivery doors, outsourced 40% of logistics, and cut 15% of G&A roles to boost margins and operational efficiency.
• Positive Sentiment: Internationally, the company is actively refranchising key markets including Australia, New Zealand, Japan, Mexico, and UK/Ireland and expanding through partners in UAE, France, Brazil, and Spain with minimal capital investment.
• Negative Sentiment: Q2 net revenue was $379.8M with organic revenue down 0.8%, while adjusted EBITDA fell to $20.1M from $54.7M, driven by McDonald’s partnership losses and higher insurance costs, and the company incurred $407M in non-cash impairment charges.
• Neutral Sentiment: The balance sheet remains under pressure with a bank leverage ratio of 4.5x and net leverage of 7.5x, but the company holds over $200M of excess liquidity to support its 2025 strategy and debt obligations.

Presentation

[Operator]

Hello, everyone, and thanks for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Krispy Kreme Second Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

I would now like to turn the call over to Christine McDevitt, Krispy Kreme Associate General Counsel. Please go ahead.

[Christine McDevitt, Associate General Counsel & Assistant Corporate Secretary at Krispy Kreme]

Thank you. Good morning, everyone. Welcome to Krispy Kreme's second quarter twenty twenty five earnings call. Thank you for joining us today. This morning, Krispy Kreme issued its earnings press release for the 2025.

[Christine McDevitt, Associate General Counsel & Assistant Corporate Secretary at Krispy Kreme]

The press release and an accompanying presentation are available on our Investor Relations website at investors.krispykream.com. Joining me on the call this morning are President and Chief Executive Officer, Josh Charlesworth and Chief Financial Officer, Rafael Duvivier. After prepared remarks, there will be a question and answer session. Before we begin, please note that during this call, we will be making forward looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations, future events or future financial performance. Forward looking statements involve a number of risks, assumptions and uncertainties, and we caution investors that many factors could cause actual results to differ materially from those contained in any forward looking statements.

[Christine McDevitt, Associate General Counsel & Assistant Corporate Secretary at Krispy Kreme]

These factors and other risks and uncertainties are described in detail in the cautionary statements in the company's earnings press release, in the company's annual report on Form 10 ks filed with the SEC and in other filings the company makes with the SEC from time to time. Forward looking statements represent the company's expectations only as of today, and the company assumes no obligation to publicly update or revise any forward looking statements, except as may be required by law. Additionally, during this call, we will reference certain non GAAP financial measures. Please refer to our earnings press release on our website for additional information regarding those non GAAP measures, including a reconciliation to the closest comparable GAAP measures. Rafael will take us through the company's financial performance in a moment, but first, here's Josh.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Thank you, Christine, and good morning, everyone. We are sharply focused on our two biggest opportunities, profitable US expansion and capital light international franchise growth. To achieve these goals, we have implemented a comprehensive turnaround plan to deleverage the balance sheet and deliver sustainable, profitable growth through one, refranchising two, improving returns on capital three, expanding margins and four, driving sustainable, profitable US growth. To deleverage the balance sheet, we have halted the quarterly cash dividend and completed the sale of our remaining interest in Insomnia Cookies, Now, we are in active discussions to restructure our well established joint venture with WKS Restaurant Group in the Western US, reducing our ownership stake and deploying the proceeds to further pay down debt. As you may recall, we have already initiated the process of refranchising select international markets, including Australia and New Zealand, Japan, Mexico, and UK Ireland.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

To improve returns on capital, we are focused on our capital light international franchise model, whilst reducing capital intensity in company owned markets. We have seen exceptional returns growing Krispy Kreme's presence across the world with franchise partners in both well established markets like South Korea and The Middle East, as well as newer markets like France and Brazil with minimal capital investment from the company. We expect future international growth to come from franchisees through both new shop openings and fresh delivery door expansion. Door expansion would be through existing sales channels like grocery and convenience, as well as in new channels like club wholesalers and quick service restaurant partners. For example, our franchisee in The UAE has started selling Krispy Kreme at about 50 KFC restaurants with plans for further expansion.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

In addition, our pipeline of new market entries with franchise partners is strong, with the first Hot Light Theater shop in Spain opening later this year. In The US, we still plan to open a new production hub in Minneapolis later this year, which will be the first spotlight theater shop in Minnesota. Aside from this strategic location, we have reduced investment in new capacity in The US, preferring to leverage existing excess capacity for growth. To expand margins, we are simplifying our business model and strengthening operations in The US to reduce costs across the P And L. In support of this, we have already taken the following actions.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

First, as announced in June, we have ended our McDonald's USA partnership effective July 2. Our efforts to bring our costs related to the partnership in line with unit demand were unsuccessful, making it unsustainable for us. Second, excluding the exit of McDonald's stores, we also completed a thorough assessment of our US fresh delivery footprint and identified approximately 1,500 underperforming doors. We've already exited more than half of these in the first half of the year with plans to complete the remaining closures by year end. More importantly, we expect to replace these with 1,100 more profitable high volume doors this year, of which more than half are already in place.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

This shift improves overall route profitability and operational efficiency, and we expect it to be immediately accretive to EBITDA margin. Third, we continue to outsource logistics. So far, we have transitioned 40% of US fresh donut deliveries to third party logistics partners. This provides more predictable logistics costs and allows our Krispy Kremeers to focus more on what they do best, make fresh donuts and bring joy to our consumers. Finally, we made a 15% reduction in G and A roles in our support center.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

We are also strengthening our US operations under the leadership of our new Chief Operating Officer, Nicola Steel. Her focus includes boosting our demand planning capabilities to improve forecasts and load outs while optimizing labor and reducing cost and waste, driving sales while minimizing product returns. She's also raising the caliber of our operations leadership, empowering Krispy Kremeers with better training and technology resources, and streamlining the doughnut manufacturing process. To drive sustainable profitable growth in The US, our marketing focus has shifted to our Original Glazed Doughnut, our most affordable, most profitable, and most iconic product typically sold by the dozen. We launched an all new multimedia marketing campaign centered on the joy of experiencing a hot, fresh original glaze, which kicked off on National Doughnut Day in June.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Early results are encouraging with the campaign driving incremental sales and renewed excitement around our signature core offering. Expansion in The US is focused on growing fresh delivery through profitable high volume doors with major customers like Costco, Walmart, Target, and Kroger. We added over 400 doors with these customers in the second quarter alone, including the promising new multi city pilot with Sam's Club. All of this expansion was complemented by strong digital growth, which increased by double digits and accounted for more than 20% of US retail sales during the quarter. We've also recently been awarded additional shelf space at Walmart on top of our existing merchandising towers and cabinets.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

We expect this to both increase sales at existing Walmart stores and help us add distribution in new stores. Today, we are only represented at about 30% of their total domestic footprint. I have full confidence in our turnaround plan, not only because of the bold strategic actions we are taking, but also because of the strength of our leadership team and the talent across the organization. To drive alignment and execution, we have revised our bonus opportunity for the 2025 to focus on driving adjusted EBITDA and free cash flow, two KPIs clearly linked to profitable growth and deleveraging our business. On the topic of talent, we recently promoted Alison Holder to Chief Brand and Product Officer and Rafael Dubivier to Chief Financial Officer.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Alison has over twenty five years of experience at Krispy Kreme, holding leadership roles across brand marketing, innovation, research and development, and manufacturing services. We have the utmost confidence in her as she assumes responsibility for our global marketing efforts, focusing on championing the iconic Original Glazed and driving sustainable, high quality growth. Raphael has been with Krispy Kreme for over six years and has held multiple leadership roles spanning international development, strategy, finance, and operations. He has a deep understanding of our business, strong financial acumen, and is a trusted partner with a proven track record. Before I hand the call over to Rafael, while we are pleased to have generated quarterly net revenue above the midpoint of our guidance, adjusted EBITDA was below our expectations, primarily due to the following factors.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

First, losses related to our now ended McDonald's USA partnership were more than originally projected. We're quickly removing our costs related to the McDonald's partnership and expect to begin recouping profitability in the third quarter. Second, during the quarter, we incurred higher insurance costs related to our own delivery efforts. The transition to outsourced US logistics is expected to provide greater cost certainty. We are already seeing more predictable logistics costs for the routes outsourced to date.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

In summary, whilst the past several quarters have certainly been challenging, we have pivoted and are executing our comprehensive turnaround plan with the actions we believe necessary to position the business for long term success. With that, Rafael will now review our second quarter financials. Thank you, Josh.

[Raphael Duvivier, CFO at Krispy Kreme]

Before we cover the results, I wanted to take a moment to introduce myself and express how honored I am to take on the CFO role of this beloved brand. I have been with Krispy Kreme for over six years leading our international businesses. Krispy Kreme is at an inflection point and to position us for sustainable profitable growth, my immediate focus is on three things deleveraging the business, improving profitability in The U. S. During the second half and leading our refranchising efforts.

[Raphael Duvivier, CFO at Krispy Kreme]

We are shifting our focus to a more capital light franchise model, which I strongly believe will provide a high return on capital and profitable predictable growth. I'm confident that we'll be able to bring in the right franchise partners to expand the business and continue our development growth. In the near future, our capital wide international franchise model will make our company look quite different than it does today. We believe our current liquidity provides us with the flexibility to meet both short term obligations and long term investments. With the amendment of our credit facility in May, we now have over $200,000,000 of excess liquidity as of the end of Q2.

[Raphael Duvivier, CFO at Krispy Kreme]

We expect this to enable the full implementation of our 2025 strategy as we continue to strengthen our balance sheet and delever the business. Shifting to the quarter, net revenue was $379,800,000 reflecting a $64,200,000 reduction related to divesture of Insulin Cookies in the third quarter last year, coupled with an organic revenue decline of 0.8% driven by lower transactions related to consumer softness. Adjusted EBITDA was $20,100,000 down from $54,700,000 last year, impacted by a combination of the divestiture of Insurgent Cookies and losses from the now ended McDonald's USA partnership. Turning to The U. S.

[Raphael Duvivier, CFO at Krispy Kreme]

Segment, we encourage that retail transactions sequentially improved to the quarter, reflecting our emphasis on the regional place. Despite this, expected consumer softness still led to retail transaction decline compared to last year. We also continued to strategically close underperforming doors. These two factors led to a 3.1% organic revenue decline. Adjusted EBITDA was $9,900,000 down from $32,700,000 last year, impacted by the sale of McSonic Cookies in the 2024, an estimated $7,000,000 to $9,000,000 impact from our now ended McDonald's USA partnership and retail transaction decline.

[Raphael Duvivier, CFO at Krispy Kreme]

Year to date, the adjusted EBITDA impact related to McDonald's USA is an estimated 13,000,000 to $15,000,000 Within our equity owned international markets, organic revenue grew 5.9% driven by point of access growth in Canada, Mexico and Japan. These markets continue to see the benefit of rolling out our hub and spoke model in a target fashion geared towards strategic customers and driving expansion with new shop development generating significant foot traffic. This include Costco and new theaters in Canada as well as new theaters in Mexico and Japan. The growth in organic revenue was partially offset by 177 strategic door closures in Japan and Mexico. Adjusted EBITDA of $18,200,000 resulted in a margin rate of 13.7% as lower transaction volumes impacted operating leverage, particularly in The UK.

[Raphael Duvivier, CFO at Krispy Kreme]

Importantly, The UK market improved margins sequentially and we are looking forward to the continued progress from the new leadership team now in place. In the market development segment, organic revenue declined 14.2% as growth in new markets such as Brazil and existing markets like Middle East were offset by the timing of product and equipment sales. Adjusted EBITDA was $8,900,000 with a margin rate roughly flat year over year at 52.9%. During the second quarter, we incurred $4.00 $7,000,000 in non cash impairment charges. This was made up of the following: partial goodwill impairment of $356,000,000 related to a quantitative assessment of goodwill triggered mainly by the decline in our market cap.

[Raphael Duvivier, CFO at Krispy Kreme]

Long live asset impairment charges of $22,000,000 and lease impairment and termination costs of $29,000,000 These impairments were impacted in part by the termination of the agreement with McDonald's USA. Again, these charges are non cash and notably do not have an impact on the company's compliance with our financial covenants under debt arrangements. Adjusted EBITDA similarly impacted cash flow as we used $32,500,000 in cash for operating activities on a year to date basis. Our bank leverage ratio was 4.5 at the end of the quarter, which is below the five leverage ratio limit in our credit facility. Our net leverage ratio, which reflects the company's net debt divided by its trading four quarters adjusted EBITDA was 7.5, impacted by the cyber incidents for which we have not yet been fully reimbursed by insurance as well as our now ended McDonough's USA partnership.

[Raphael Duvivier, CFO at Krispy Kreme]

We are focused on improving profitability to benefit both leverage and cash flow through not only operational actions that Josh outlined, but also driving improvement in working capital and further SG and A savings. Additionally, I have been overseeing the process of refranchising our international equity markets. I believe that this is the right way to unlock continued sales growth and unit development in this market, while allowing us to significantly deleverage. We will continue to proceed prudently seeking to refranchise only with well capitalized scaled operators with regional expertise and the capability to drive continued growth. With that, I'll turn it over to Josh for his closing remarks.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Thanks, Rafael. In summary, we are highly focused on our comprehensive turnaround plan to deleverage the balance sheet and deliver sustainable, profitable growth through: one, refranchising two, improving returns on capital three, expanding margins and four, driving sustainable, profitable US growth. With this plan in place, I am confident in our ability to capitalize on the significant growth opportunity ahead and share the joy of Krispy Kreme with more people in more places around the world. Operator, let's now open it up for q and a, please.

[Operator]

Your first question comes from Rahul Kwathapali with JPMorgan.

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

Good morning, guys. Thanks for all the color, Josh, Rafael. My question is on the DFD doors. I mean, this comes with a significant last mile delivery cost as you guys know. And are there tools to better manage profitability per drop even when employing the third party strategy?

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

And might some of this include introduction of products with longer shelf stability, which was done, in the previous era? And I have a follow-up.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Yes. Good morning. It's important with the DFD model to understand that when the conditions are right in high traffic doors, when in store visibility is high, the volumes are high, and that's when we see sustainable, profitable sales. We actually see that with several of our customers already today in The US and are expanding continue to expand with them. That combined with the shift to third party logistics means that we then have predictable costs to go with that.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Look, we've obviously shifted the business model and implemented this turnaround plan that we shared today to ensure sustainable profitable sales. And so the actions we're taking are all about making sure that we drive profitable sustainable sales and deleverage the company going forward.

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

Thank you. And then of the two forty hot light theaters or so in The U. S, these are often located in the higher cost retail areas. Can we consider driving more productivity out of the on-site customer visits or to perhaps consolidating more capacity into fewer, stores as we go through this turnaround?

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Well, there's definitely an opportunity with the production hubs to make sure that we optimize efficiency. And Nicola, our new COO, is very focused on that. She's identified opportunities definitely within the system as we optimize the DFD footprint and then expand with these high traffic DFD partners to make sure that they get more efficient over time. That's certainly the case.

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

Perfect. And then one last one, if I may. I I did see the update on the international businesses on refranchising, which we have been discussing for a while. Can you share, like, how as an organization today, you're handicapping the duration risk of executing this? Because there are, like these are, like, large assets and that's spread over multiple geographies.

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

How How quickly for lack of better term can we look at executing this in your view?

[Raphael Duvivier, CFO at Krispy Kreme]

Hey, Howard. This is Rafael. Thank you. Look, we are targeting doing one to two deals this year. I have to counter about this. We have initiated the process, as I mentioned, on Japan, Mexico, UK and Australia. And we use the proceeds to deleverage and we pay down our debt.

[Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan]

Thank you, guys.

[Operator]

Your next question comes from Daniel Guglielmo with Capital One Securities.

[Daniel Guglielmo, Equity Research Analyst at Capital One Securities, Inc]

Hi, everyone. Thanks for taking my question. I appreciate the the turnaround plans. When when thinking about the four components, are you able to get started on all four of those kinda at the the same time, or or is one kinda more important to get going on first before you can really kinda jump in to the others.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Yeah. No. We've we've already implemented this turnaround plan. We've we've those actions are are already underway. Rafael referenced the process for international refranchising.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

We also shared today that we are in active discussions with our Western U. S. Joint venture partner for them to move to the franchisee model. Regarding the other activities, such as optimizing the DFD footprint, implementing the third party logistics, making the cuts to G and A, these are things that we have already put in place. That means we expect to see the benefits already within this year.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

I mean, I would expect the EBITDA to be higher in the second half of the year than in the first half. I would expect cash flow to be positive. These are things that are very much already in flight.

[Daniel Guglielmo, Equity Research Analyst at Capital One Securities, Inc]

Great. I yeah. I appreciate that. That that makes sense. And then I think it was was on the last call.

[Daniel Guglielmo, Equity Research Analyst at Capital One Securities, Inc]

We had talked about potentially rationalizing, I guess, five that still kind of number? Does that go into the kind of

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Unfortunately, Daniel, the the the line broke up there. You said we've been talking about rationalizing, and they broke up. Do you mind repeating, please?

[Daniel Guglielmo, Equity Research Analyst at Capital One Securities, Inc]

Yep. Yep. For sure. So so, yeah, we had talked about rationalizing about five to 10% of the DFT doors. And I'm curious, is that kind of still in the works?

[Daniel Guglielmo, Equity Research Analyst at Capital One Securities, Inc]

Is that kind of a good number? Does it go into the franchising of some of the properties out West? Or how are you guys thinking about that now?

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Well, what we've chosen to do, following the exit from McDonald's, is look at our whole footprint. And we identified 1,500 doors that were below average weekly sales, so much less profitable, we've already well on our way of intervening on those all at the same time while adding higher weekly sales doors with major customers like Target, we've seen a lot of growth this year Walmart, we're growing in Costco. So that is a shift we're making as part of the turnaround plan. Going forward, we would expect, once that is complete, a small amount of churn, probably around about 5% a year. But really, this is a decisive intervention to get profitable sales increased in the back half of this year as part of the turnaround.

[Daniel Guglielmo, Equity Research Analyst at Capital One Securities, Inc]

Great. Thank you. Appreciate all the color.

[Operator]

Your next question comes from Sara Senatore with Bank of America.

[Sara Senatore, Senior Research Analyst at Bank of America]

Thanks. One question and then, I mean, first a clarification. I'm sorry, I came on the call a little bit late. I wanted to understand your thoughts about CapEx. I know historically, you kind of guided to percentage of revenue, that 7% to 8%.

[Sara Senatore, Senior Research Analyst at Bank of America]

So I wanted to make sure that there is that's part of the sort of more capital light approach, sort of bringing that down more in line with perhaps where, some of the franchise businesses might be. So that was point one, and I apologize if I missed it. But point two, I guess, is a bigger question, which is, feels like some of what you're talking about now is this turnaround is sort of unraveling what were initial growth drivers, I think, insourcing some of logistics and production or this QSR partnership. So I guess I'm trying to understand, like, what what a steady state Krispy Kreme should look like. Should it is it is it more of a CPG company?

[Sara Senatore, Senior Research Analyst at Bank of America]

Should it be perhaps part of a bigger portfolio? I you know, it it feels like the strategy, you know, has shifted a bit, and I I'm I'm trying to envision, you know, kind of the the long term structure. Thanks.

[Raphael Duvivier, CFO at Krispy Kreme]

Hey. How are you? Sorry. I'll take the first one. Yeah.

[Raphael Duvivier, CFO at Krispy Kreme]

I mean, as we think about our new and better model, our capital light model, you would expect and should expect lower capital, higher EBITDA to cash conversion, higher margin and even more important, a more predictable model. So as we move our international refranchising efforts, you should start seeing CapEx as a percentage of revenue going down. Even the second half of this year, as Josh mentioned, we should expect positive cash flow and already lower capital than we had in the first half.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

And then, sir, to the second question, it is important to understand that Krispy Kreme is primarily a growth story. It's more about how we maximize shareholder value as we take advantage of that opportunity. The distribution partnership with McDonald's, although proved unprofitable, hence our decision, we saw significant incremental sales in those geographies reminding us of the fact this is a growth story because people want to access to our fresh donuts. It's about the model to get there. It's clear that franchising is a capital efficient way of doing that, particularly internationally.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

That is clearly going to be the model. And to the CapEx point, working with franchisees to take advantage of that development opportunity. And then overall, it's still a multichannel model. You've got opportunities in retail. We're seeing strong digital growth, as we mentioned today.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

But then, of course, expansion with major national partners. The multiple channels continues to play a role. It's just the conditions have to be right, and this turnaround plan is about making sure that those conditions are right with those DFD accounts in The US or with franchise partners so that we have sustainable profitable growth and deleverage the balance sheet as we go.

[Sara Senatore, Senior Research Analyst at Bank of America]

Thanks.

[Operator]

There are no further questions at this time. I'll now turn the conference back over to Josh Charlesworth for closing remarks.

[Joshua Charlesworth, President, CEO & Director at Krispy Kreme]

Well, thank you, everybody, for your interest in Krispy Kreme today, and thank you also to our hardworking Krispy Kremeers all over the world. We are focused on executing our new business model to maximize shareholder value. The turnaround plan we shared today is in full swing. We are taking the appropriate actions to deleverage the balance sheet and drive sustainable, profitable growth. Thank you again.

[Operator]

This concludes today's conference call. You may now disconnect.

Participants

Executives

• Christine McDevitt, Associate General Counsel & Assistant Corporate Secretary
• Joshua Charlesworth, President, CEO & Director
• Raphael Duvivier, CFO

Analysts

• Rahul Krotthapalli, Equity Research - Restaurants & Leisure at JP Morgan
• Daniel Guglielmo, Equity Research Analyst at Capital One Securities, Inc
• Sara Senatore, Senior Research Analyst at Bank of America