Why Krispy Kreme Fell Today

Core Viewpoint - Krispy Kreme's stock has faced significant declines due to poor sales, falling profits, and the cancellation of a partnership with McDonald's, leading to a 64% drop in stock value for 2025 [1][5] Group 1: Stock Performance - Shares of Krispy Kreme fell by as much as 10.2% before closing down 3.6% on the day [1] - The stock has plummeted 64% year-to-date [1] Group 2: Analyst Ratings and Opinions - A Wall Street analyst downgraded Krispy Kreme's stock rating from neutral to underweight, expressing skepticism about the company's turnaround plan [2] - J.P. Morgan analyst Rahul Krotthapalli highlighted risks associated with the turnaround plan, noting that current sales trends are negative and the company's organic growth rate declined by 0.8% last quarter [5][7] Group 3: Turnaround Plan Details - Krispy Kreme's turnaround plan includes cost-cutting measures related to the terminated McDonald's partnership and refranchising its international store footprint [3] - The plan also involves outsourcing logistics to a third party, which may reduce operational risks but also lower revenue and profits [4][5] Group 4: Financial Considerations - Krispy Kreme currently has $957 million in debt, which adds to the risk of its turnaround strategy [5] - While the focus on cost cuts and return on invested capital may lead to profitability improvements, the company remains growth-challenged, making it difficult to predict a successful turnaround [7]