Krispy Kreme, Inc. ( DNUT ) shares are trading lower on Thursday after the company reported adjusted earnings per share of a five-cent loss in the first quarter, which is in line with analyst estimates.

Quarterly sales of $375.18 million (down 15.3% year over year) missed the Street view of $384.376 million. Organic revenue declined 1% to $374.7 million amid consumer softness, leading to a decline in doughnut shop transaction volume.

Revenues declined primarily due to the $64.3 million reduction associated with the divestiture of a majority stake in Insomnia Cookies in the third quarter of fiscal 2024.

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The company reported adjusted EBITDA of $24 million, down 58.8% year over year. Adjusted EBITDA margin contracted 670 basis points on a year-over-year basis to 6.4%.

During the first quarter of 2025, the company invested $25.9 million, or 6.9% of net revenue, in capital expenditures.

As previously announced, the company continues to evaluate opportunities to franchise certain international markets, including Australia and New Zealand, Japan, Mexico, and the U.K. and Ireland.

Krispy Kreme has also decided to no longer pay quarterly cash dividends to holders of the company’s common stock.

Outlook: Krispy Kreme expects second-quarter sales to range between $370 million and $385 million, below the estimated $393.85 million.

Given the macroeconomic softness and the uncertainty around the McDonald’s deployment schedule, Krispy Kreme is withdrawing its prior full year outlook and not updating it at this time.

As of March 30, Krispy Kreme doughnuts are now available in more than 2,400 McDonald’s restaurants. 

“The company is reassessing the deployment schedule together with McDonald’s while it works to achieve a profitable business model for all parties and does not expect to launch in any additional restaurants in the second quarter of 2025,” it said in a press release.

Price Action: At the last check on Thursday, DNUT shares are trading lower by 27.4% to $3.142.

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