Krispy Kreme (DNUT) Q2 2025 earnings summary

Executive summary

• Net revenue for Q2 2025 was $379.8 million, down 13.5% year-over-year, mainly due to the sale of Insomnia Cookies and the end of the McDonald's USA partnership.

• GAAP net loss was $441.1 million, driven by $406.9 million in non-cash goodwill and asset impairment charges.

• Adjusted EBITDA was $20.1 million, a 63.3% decline from the prior year, reflecting lower transaction volumes and higher logistics costs.

• A comprehensive turnaround plan is underway, focusing on refranchising, capital efficiency, margin expansion, deleveraging, and sustainable U.S. and international growth.

• Leadership changes and operational restructuring are being implemented to drive global marketing, financial strategy, and operational efficiency.

Financial highlights

• Organic revenue declined 0.8% year-over-year; net revenues for the quarter were $379.8 million, down from $438.8 million.

• Adjusted EBITDA for Q2 2025 was $20.1 million, down from $54.7 million; Adjusted EBIT was $(7.8) million.

• Cash used for operating activities was $32.5 million in Q2 2025; free cash flow for H1 2025 was negative $107.5 million.

• Goodwill and asset impairments totaled $406.9 million, primarily in the U.S., U.K., and Australia.

• Net leverage ratio increased to 7.5x, up from 4.5x at year-end 2024.

Outlook and guidance

• Profitability is expected to improve in Q3 2025 as costs from the McDonald's USA partnership are removed.

• The turnaround plan targets positive cash flow in the second half of 2025, reduced leverage, and sustainable growth through refranchising and operational efficiency.

• Capital investment is expected to decrease, focusing on franchisee development and asset efficiency.

• Anticipated completion of underperforming door closures and replacement with more profitable doors by year-end.

• Plans to open in 3-4 new countries in fiscal 2025 and continue refranchising international equity markets.