Krispy Kreme Doughnuts, Inc. (NYSE: KKD), today reported a 46.8% increase in net income to $13 million for fiscal second quarter 2004 ended August 3. Diluted earnings per share increased to $0.21 in the second quarter compared with $0.15 for the same period in Fiscal 2003.

Total company revenues, which include sales from company stores, franchise operations, Krispy Kreme Manufacturing and Distribution (KKM&D) and Montana Mills rose 41.1% to $161.8 million. Systemwide sales rose 27.6% to $238.5 million and comparable store sales jumped 11.3% for the quarter.

During the quarter, 22 new Krispy Kreme stores were opened in twelve new markets including the first store outside North America in Sydney, Australia.

Based on these numbers, the company revised its three to five year operating income as a percent of sales target upward to 20% from 15%. Krispy Kreme now expects to earn $0.91 per fully diluted share, or $0.02 above consensus for Fiscal Year 2004.

Krispy Kreme shares were trading up in early pre-market trading.