Dec 12, 2008

The ‘Krispy Kreme’ slide!!

Today, I start writing again after a long hiatus. And today, I see news of The Great Krispy Kreme slide. More than $5 million in losses in a quarter is no mean achievement. And Krispy Kreme (KK) has done it again. I took a closer look at theuntitled stock and how it has been moving for the last year. And what I found amazed me. Look at the chart to get a better idea. July looked good but the company has managed to slide steadily ever since. After the news however, the stock dropped down a modest 8%. Lets see how tomorrow’s day goes.

What the CEO had to say was even more intriguing.

"I've said many times this transformation is going to take time, and it is," Chairman and Chief Executive James Morgan said on the earnings call. "We will be prepared as best we can be for any external factors beyond our control, and we also recognize that the road of the next few quarters may not be a smooth one."

What seemed right to hear was that the brand is still strong. The business is what is weak. And they’re looking long term already. Saying that the next 24 months are unpredictable is a brave statement. But hopefully steps to resolve this problem have already been started like the CEO has promised.

kk_logoThe Competition: The other players in the field are no nincompoops either. Dunkin Donuts has been having steady revenues. Being privately held is an obvious advantage it has over KK. But the fact that they are expanding their product offerings in line to looking at killing KK is what is to be noted. The sad part of this decline is that over 6.6% of this comes from the supply chain. If KK is going to stage any recovery by 2011 that the CEO has promised, its supply chain will have to hold it steady and not crumble under it. A well written article talks more about this.

I however, will leave you with these words of the CEO.

“2010 will be a transitional year for Krispy Kreme, which should set up a prolonged period of growth in fiscal year 2011 and beyond."

Dec 12, 2008

The ‘Krispy Kreme’ slide!!

Today, I start writing again after a long hiatus. And today, I see news of The Great Krispy Kreme slide. More than $5 million in losses in a quarter is no mean achievement. And Krispy Kreme (KK) has done it again. I took a closer look at theuntitled stock and how it has been moving for the last year. And what I found amazed me. Look at the chart to get a better idea. July looked good but the company has managed to slide steadily ever since. After the news however, the stock dropped down a modest 8%. Lets see how tomorrow’s day goes.

What the CEO had to say was even more intriguing.

"I've said many times this transformation is going to take time, and it is," Chairman and Chief Executive James Morgan said on the earnings call. "We will be prepared as best we can be for any external factors beyond our control, and we also recognize that the road of the next few quarters may not be a smooth one."

What seemed right to hear was that the brand is still strong. The business is what is weak. And they’re looking long term already. Saying that the next 24 months are unpredictable is a brave statement. But hopefully steps to resolve this problem have already been started like the CEO has promised.

kk_logoThe Competition: The other players in the field are no nincompoops either. Dunkin Donuts has been having steady revenues. Being privately held is an obvious advantage it has over KK. But the fact that they are expanding their product offerings in line to looking at killing KK is what is to be noted. The sad part of this decline is that over 6.6% of this comes from the supply chain. If KK is going to stage any recovery by 2011 that the CEO has promised, its supply chain will have to hold it steady and not crumble under it. A well written article talks more about this.

I however, will leave you with these words of the CEO.

“2010 will be a transitional year for Krispy Kreme, which should set up a prolonged period of growth in fiscal year 2011 and beyond."