Krispy Kreme (DNUT) Q1 2026 earnings summary

Executive summary

• Achieved significant progress on turnaround plan, including refranchising in Japan and the Western U.S., outsourcing U.S. logistics, and expanding U.S. access points, resulting in reduced net leverage and improved adjusted EBITDA margin.

• Net revenue for Q1 2026 was $367 million, down 2.2% year-over-year due to strategic closures and the end of the McDonald's USA partnership.

• Adjusted EBITDA rose 38% year-over-year to $33.1 million, reflecting margin expansion and productivity initiatives, especially in the U.S. segment.

• Net loss improved to $22.7 million from $33.4 million year-over-year, driven by operational efficiencies and cost reductions.

• Free cash flow turned positive at $11.4 million, up $58.1 million year-over-year.

Financial highlights

• Systemwide sales were $485.3 million, up 0.7% in constant currency, excluding McDonald's USA partnership.

• Operating expenses decreased 5.4% to $188.1 million, and SG&A expenses fell 2.3% to $58.0 million.

• Depreciation and amortization expense was $32.1 million, down 5.3% year-over-year.

• Net leverage ratio improved to 5.5x, down from 6.7x at year-end 2025.

• Total available liquidity at quarter-end was $303 million, including $74 million in cash.

Outlook and guidance

• Full-year 2026 net revenue guidance: $1.25 billion–$1.35 billion.

• Systemwide sales expected to increase 2%-4% in constant currency from $1.96 billion in 2025.

• Adjusted EBITDA guidance: $140 million–$150 million, including impact of completed refranchising.

• Capital expenditures projected at $50 million–$60 million, down significantly from last year.

• Net leverage ratio targeted below 5.5x and positive free cash flow of more than $15 million expected.