Investing in Krispy Kreme (DNUT)? Don't Miss Assessing Its International Revenue Trends

Zacks Equity Research

Mon, Nov 11, 2024, 6:15 AM 4 min read

Have you assessed how the international operations of Krispy Kreme (DNUT) performed in the quarter ended September 2024? For this doughnut wholesaler and retailer, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.

In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.

Participation in global economies acts as a defense against economic difficulties at home and a pathway to more rapidly developing economies. However, it also comes with the complexities of dealing with fluctuating currencies, geopolitical risks and different market dynamics.

Our review of DNUT's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

The company's total revenue for the quarter stood at $379.87 million, declining 6.8% year over year. Now, let's delve into DNUT's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

Decoding DNUT's International Revenue Trends

During the quarter, Market Development contributed $20.79 million in revenue, making up 5.47% of the total revenue. When compared to the consensus estimate of $23.29 million, this meant a surprise of -10.73%. Looking back, Market Development contributed $24.24 million, or 5.52%, in the previous quarter, and $41.06 million, or 10.08%, in the same quarter of the previous year.

International generated $130.7 million in revenues for the company in the last quarter, constituting 34.41% of the total. This represented a surprise of -2.47% compared to the $134 million projected by Wall Street analysts. Comparatively, in the previous quarter, International accounted for $125.27 million (28.55%), and in the year-ago quarter, it contributed $106.13 million (26.05%) to the total revenue.

Revenue Forecasts for the International Markets

For the current fiscal quarter, it is anticipated by Wall Street analysts that Krispy Kreme will report a total revenue of $414.25 million, which reflects a decline of 8.1% from the same quarter in the previous year. The revenue contributions are expected to be 6.4% from Market Development ($26.49 million) and 33.6% from International ($139.15 million).

For the entire year, the company's total revenue is forecasted to be $1.67 billion, which is a reduction of 0.7% from the previous year. The revenue contributions from different regions are expected as follows: Market Development will contribute 5.7% ($96.02 million) and International 31.3% ($523.16 million) to the total revenue.

Wrapping Up

The dependency of Krispy Kreme on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.

In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

With an impressive externally audited track record, our proprietary stock rating tool - the Zacks Rank - harnesses the power of earnings estimate revisions and serves as an effective indicator of a stock's near-term price performance.

Krispy Kreme, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Examining the Latest Trends in Krispy Kreme's Stock Value

Over the past month, the stock has gained 3.6% versus the Zacks S&P 500 composite's 4.4% increase. The Zacks Consumer Staples sector, of which Krispy Kreme is a part, has declined 1.4% over the same period. The company's shares have increased 3% over the past three months compared to the S&P 500's 13.1% increase. Over the same period, the sector has declined 1.1%.

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