Krispy Kreme's Sour Note

Krispy Kreme's Sour Note

Krispy Kreme Doughnuts reported second-quarter earnings after hours on Thursday, and while the company beat revenue expectations and increased its same-store sales by 10%, it missed on earnings expectations, and the stock took a hit as a result.

However, the CEO called this an outstanding quarter, and after 19 consecutive quarters of same-store sales growth, Motley Fool analyst Charly Travers says he doesn't see the stock price backslide as justified. He suggests to investors that when a company is performing as strongly as Krispy Kreme is today, the occasional earnings miss should be nothing to be concerned about.

Host Alison Southwick then asks Charly what he thinks of the competition in this space, companies such as Dunkin' Donuts and Starbucks , places where customers may get their morning fix instead of at Krispy Kreme. Charly highlights Dunkin' as definitely the most direct comparison to Krispy Kreme, but says that Dunkin's massive size compared to relatively tiny Krispy Kreme definitely makes Krispy Kreme the one to watch here. Charly ends by highlighting Krispy Kreme's biggest challenge going forward, and tells investors whether or not he would be a buyer after today's pullback.

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Alison Southwick has no position in any stocks mentioned. Charly Travers has no position in any stocks mentioned. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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