Wall Street Watch Tuesday: Krispy Kreme's Earnings Are Delicious

\Krispy Kreme's Earnings Are Delicious
\Krispy Kreme's Earnings Are Delicious

There's apparently still a healthy appetite for Krispy Kreme's (KKD) unhealthy sugary treats.

The doughnut maker posted blowout quarterly results after Monday's market close.

Revenue climbed 9 percent to $107.1 million, fueled by a robust 6.8 percent spike in same store sales. Comps have been positive at Krispy Kreme for 16 consecutive quarters. Things look even better on the bottom line, as adjusted earnings soared 76 percent to $0.12 a share. Analysts were only holding out for a profit of $0.08 a share on $104.6 million in revenue.

There are now 731 Krispy Kreme stores out there, and just 96 of the locations are company-owned. Most of the doughnuts consumers enjoy come from either franchise locations or the company's growing retail distribution.

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Krispy Kreme is apparently a hit overseas, too. More than 75 of the roughly 100 locations that will open in the next fiscal year will be international franchise locations.

Given the company's rosy performance it isn't a surprise to see it raise its guidance for the balance of this fiscal year and initiate an upbeat outlook for next year. The company's doughnuts may be glazed, but the similarly coated optimism is a winning recipe for investors.

Other Things Worth Watching

• Nuance Communications (NUAN) probably didn't want to shout out the news: The pioneer of voice-recognition technology announced softer than expected revenue after Monday's market close. Revenue rose 28 percent to $468.8 million. That's impressive, but it's well short of the $498 million that analysts were forecasting. Nuance is in a promising place as its technology moves beyond automated phone banks to voice-activated smartphones and cars.

• Retailers are posting mixed results this earnings season. Urban Outfitters (URBN) checked in on the disappointing end of the mall spectrum on Monday night. Urban Outfitters rang up a profit of $0.40 a share, just shy of what Wall Street was expecting as comparable store sales slipped 1 percent. Gross profit margins are improving as the chain is resorting to fewer markdowns, but it's not where it wants to be ahead of the telltale holiday shopping season.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. Motley Fool newsletter services have recommended buying shares of Nuance Communications.

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