Krispy Kreme(US:DNUT)2022-02-22 18:23Financial Data and Key Metrics Changes - In Q4 2021, net revenue grew 13.8% year-over-year to $371 million, or 21.5% growth excluding the impact of an additional 53rd week in 2020 [22] - For the full year, net revenue increased 23.4% to $1.38 billion [22] - Adjusted EBITDA for Q4 increased 14.4% to $47.7 million, with adjusted EBITDA margins rising 10 basis points to 12.9% [24] - Full-year adjusted EBITDA increased 29.2% to $187.9 million, with margins increasing 60 basis points to 13.6% [25] - GAAP net income for Q4 was $4.3 million, compared to a GAAP net loss of $24.8 million in the same period a year ago [25] Business Line Data and Key Metrics Changes - In the U.S. and Canada segment, total revenues in Q4 increased 10.5% to $249 million, or 18.8% excluding the impact of the additional 53rd week [26] - Organic growth in the U.S. and Canada for Q4 was 9.1%, or 17.3% excluding the exit of the legacy wholesale business [27] - Insomnia Cookies revenue for 2021 increased by more than 30%, with nearly 20% growth excluding new store revenue [11] - The branded sweet treats segment improved fulfillment rates from 65% in Q3 to over 85% in Q4, leading to significant sales growth [10] Market Data and Key Metrics Changes - Global points of access increased by more than 2,000 to over 10,400, a 25% increase over 2020 [9] - International segment net revenue grew 26% in Q4 to $90 million, while organic revenue grew 31% [32] - International adjusted EBITDA for Q4 grew 25% to $20.7 million, with margins of 23% [33] Company Strategy and Development Direction - The company aims to grow points of access to over 50,000 in the coming years, representing a 5x increase from current levels [18] - The hub and spoke model is central to the company's strategy, allowing for capital-efficient growth and increased points of access [8] - E-commerce is a core pillar of the omni-channel strategy, with a goal to achieve over 25% e-commerce penetration long-term [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential, expecting revenue growth between 11% and 13% for 2022 [35] - The company anticipates adjusted EBITDA growth of 12% to 16% in 2022, with margin expansion in both U.S. and international segments [35] - Management noted that operational disruptions from Omicron were minimal, with demand remaining strong [37] Other Important Information - The company completed a shift to a 100% fresh model in early 2021, enhancing pricing power and purchase frequency [17] - The company plans to invest approximately $115 million to $120 million in capital expenditures in 2022, focusing on production hubs and Insomnia Cookie locations [37] Q&A Session Summary Question: What drives the expected increase in enterprise EBITDA margin for FY '23? - Management indicated that efficiencies from the hub and spoke model, growth in e-commerce, and profitability from the branded sweet treats business will contribute to the margin increase [40][41] Question: What is the current pricing strategy and inflation assumptions for FY '22? - Management confirmed a double-digit price increase in the U.S. and high single-digit globally, with expectations to manage inflation through further price increases if necessary [44][45] Question: What is the outlook for DFD doors in the U.S.? - Management acknowledged a temporary decline in DFD doors but expects to add 150 new doors in Q1 2022 and around 500 for the full year [48][50] Question: Can you elaborate on the sale leaseback gain in Q4? - Management confirmed a sale leaseback generated over $11 million in cash, with an $8.7 million GAAP gain added back for adjusted EBITDA [51] Question: What are the dynamics in access points and product lines? - Management noted strong performance across all channels, with DFD being the largest contributor, and expects balanced growth across all channels in 2022 [53][56]