Krispy Kreme Isn't "Hot Now"
Hold on to your hats, Krispy Kreme Doughnuts investors. Today's forecast calls for rough seas and serious headwinds.
The market is absolutely battering the donut maker after it reported third-quarter earnings late Monday. Krispy Kreme saw a scrumptious 34% jump in profit, as well as a more modest increase in revenue. So why'd the stock dive more than 15% today?
Put simply: Guidance and cannibalization. Krispy Kreme is lowering its earnings expectations for 2015, and the company warned stores may be stealing business from one other. Investors are spooked as a result.
There could be some profit-taking happening, too. Krispy Kreme shares had been up about 150% this year, so investors might simply be taking money off the table.
Krispy Kreme stock experienced a roller-coaster decade after peaking in 2003, but since hitting an all-time low in 2009, the stock's astounding climb has rewarded patient investors. Motley Fool analyst Bryan White says today's drop isn't terribly surprising, and believes international growth will be key for this company going forward.
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The article Krispy Kreme Isn't "Hot Now" originally appeared on Fool.com.Bryan White has no position in any stocks mentioned. Erin Kennedy 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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