Krispy Kreme reported third‑quarter 2025 results that included net revenue of $375.3 million, a 1.2% decline from the same period a year earlier, and an adjusted EBITDA of $40.6 million, up 17% year‑over‑year. The company posted an adjusted net income of $1.4 million, translating to earnings per share of $0.01, a beat of $0.07 over the consensus estimate of –$0.06.
Revenue fell mainly because the company sold a majority stake in Insomnia Cookies in Q3 2024, which removed a significant portion of its top‑line. Despite the headline decline, organic revenue grew 0.6% year‑over‑year, driven by a 0.6% increase in the international segment and offset by a modest decline in U.S. operations. The U.S. fresh‑delivery network, a key focus of the turnaround, contributed to the organic growth and helped cushion the impact of the divestiture.
Profitability metrics improved markedly. Adjusted EBITDA margin expanded to 10.8% from 9.1% a year earlier, driven by cost‑control initiatives, the removal of McDonald’s partnership expenses, and $9.3 million in insurance recoveries from a 2024 cybersecurity incident. Free cash flow rose to $15.5 million, and the net leverage ratio improved to 7.3x from 7.5x, reflecting a stronger balance‑sheet position.
CEO Josh Charlesworth highlighted the progress: “The third quarter marked a significant pivot as we implemented our comprehensive turnaround plan focused on profitable U.S. expansion and capital‑light international franchise growth. Early results show reduced leverage, positive free cash flow, and substantially higher adjusted EBITDA.” He added that the company remains focused on expanding profitable U.S. delivery points and accelerating refranchising in international markets while maintaining disciplined capital allocation.
Management guided for continued sequential improvement in Q4 2025, projecting higher adjusted EBITDA and maintaining positive free cash flow. The guidance signals confidence that the turnaround strategy—cost discipline, operational leverage, and a shift to a franchise‑heavy model—will sustain momentum. The company also indicated a reduction in capital expenditures for 2026, underscoring a focus on cash‑generating operations.
Investors responded positively to the results, with the EPS beat and robust free‑cash‑flow generation standing out as key drivers. The market’s reaction reflected confidence in the company’s ability to translate cost savings and operational efficiencies into profitability, while the modest revenue decline was contextualized by the Insomnia Cookies divestiture and the ongoing transition to a more capital‑light business model.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.