Krispy Kreme (DNUT) Piper Sandler Growth Frontiers Conference summary

U.S. expansion strategy

• Plans to increase production hubs from 151 to over 200 by end of 2026, supporting a goal of 23,000 points of access, up from 8,000 today.

• Expansion leverages underutilized existing facilities, conversions, and 25 new hubs, most already in progress.

• New hubs will include a mix of retail, industrial, and hybrid models, with increased automation and efficiency.

• Chicago rollout starts late fall, with a hybrid facility serving McDonald's and other accounts, aiming for over 500 locations.

• Average U.S. hub sales are $5M, with larger hubs exceeding $10M, driving higher margins and operating leverage.

Financial outlook and margin progression

• Startup costs are being absorbed in 2024, but U.S. EBITDA margins are still expanding.

• Margin improvement expected to accelerate in the second half of 2025 and continue into 2026.

• CapEx remains at 6%-8% of revenue, with deleveraging targeted to reach 2.5x by 2026.

• Proceeds from Insomnia Cookies sale used to delever, with optionality to fully exit remaining stake.

Logistics and distribution evolution

• Currently uses in-house logistics but is piloting third-party providers for improved service and efficiency.

• Trials in D.C. and L.A. showed better service and quality; financial assessment of outsourcing ongoing.

• Hybrid logistics model likely, with flexibility to own or outsource by market.

• Third-party partners may offer advanced routing and technology, but core focus remains on execution.