Industry News | June 26, 2002

Krispy Kreme Stands by Earning Expectations

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Yesterday Krispy Kreme Doughnuts, Inc. announced t the acquisition of the Toledo, Ohio, market. The company has agreed to purchase the rights, as well as the associated assets from an area developer franchisee who currently operates one store in the market. Krispy Kreme declined to disclose the purchase price but did indicate that it expects the acquisition to be modestly accretive to earnings in the current fiscal year.

Scott Livengood, the Krispy Kreme's chairman, president and CEO said, "We are very excited about this acquisition. With only one store in this market, we believe there is exceptional growth opportunity for our brand in terms of both additional retail sales and greater penetration in off-premises wholesale channels."

Additionally, the company expressed comfort with its latest earnings guidance of $0.14 per diluted share for the second quarter and $0.63 per diluted share for Fiscal 2003. Krispy Kreme anticipates systemwide comparable store sales of 10% for the year and second quarter expectations of 10%, and anticipates opening 62 stores in 15 new markets. Development of international markets in Fiscal 2003 also appears imminent.

Referring to the current business trends, Livengood added, "Our business momentum continues to be very strong. New store and new market openings, recent record first week sales in new stores and very strong comparable store sales are all contributing to this strength."