Krispy Kreme shares plummet
CHARLOTTE, N.C. — Shares of Krispy Kreme Doughnuts Inc.’s fell sharply Monday as a 79 percent plunge in third quarter earnings and an intensifying accounting investigation overshadowed the pastry maker’s statement that the low-carb craze might be easing.
The Winston-Salem-based company also withdrew its sales forecast and said it would not provide an outlook for the current quarter and 2005.
Losses for the quarter were $3 million, or 5 cents per share, from a profit of $14.5 million, or 23 cents per share, a year ago.
“Clearly we are disappointed with our third quarter results,” chairman and chief executive officer Scott Livengood said in a statement. “We are focused on addressing the challenges facing the company and regaining our business momentum.”
Those challenges include a federal investigation into its accounting practices. The company said earlier this year that the Securities and Exchange Commission was looking into its franchise reacquisitions and its future earnings outlooks.
Since May, Krispy Kreme has closed a number of stores. The company also said it would close a $4.6 million doughnut plant in northeast Ohio due to oversupply problems.
On a conference call with analysts, Livengood said the low-carb dieting phenomenon is still a factor in the company’s soft sales, but he believes the trend might have peaked.