Categories Analysis, Consumer, IPO

Krispy Kreme IPO: All you need to know about the doughnut chain’s return to public markets

The management expects to raise about $100 million in the IPO, which will be managed by a group of underwriters led by JPMorgan and Morgan Stanley

After a slow start to the year, the IPO market is gaining steam with a slew of companies making their Wall Street debut in recent months and many lined up to go public. Coffeehouse chain Krispy Kreme Doughnuts, Inc., which exited the stock market more than five years ago, is seeking to become a public entity once again.

Second IPO

The North Carolina-based doughnut maker initially got listed on the NASDAQ stock exchange in 2000 but went private around five years ago, after switching to the New York Stock Exchange a few months after the IPO. Considering those factors, the market is closely following the latest developments. Krispy’s management expects to raise about $100 million in the IPO that is expected later this month. The group of underwriters managing the offering will be led by JPMorgan and Morgan Stanley.

Read management/analysts’ comments on quarterly results

In a submission made to the Securities and Exchange Commission this week, the company said it is planning to return to the stock market. While it intends to have the stock listed under the ticker symbol DNUT, the other terms and the IPO date are yet to be disclosed. In the previous run, the shares traded under the ticker symbol KKD until Krispy was taken private by Germany-based JAB Holding in 2016 for $1.35 billion.

Record Sales

In fiscal 2020, the company recorded total sales of $1.12 billion, the highest in its history. Earnings, adjusted for one-off items, came in at $47.9 million. Full-year adjusted EBITDA was $152.8 million. The combined annual sales growth rate of 19% — between 2016 and 2020 — underscores the sustainability of the business model and resilience to macroeconomic uncertainties like those triggered by the pandemic. It is estimated to have sold 1.3 billion doughnuts in 30 countries last year.

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The management expects that recent growth initiatives, with a focus on innovation and product quality, would position the company to expand its market share in the rapidly growing global indulgence market, with an estimated value of $650 billion. Krispy has been serving doughnuts to all kinds of customers through its retail outlets and partner outlets for 83 years. It has a full-fledged omnichannel network and a fast-growing e-commerce platform.

Road Ahead

After ending what is probably the best year in its history, the company looks to tap new opportunities created by the vaccine-led market reopening. Insomnia Cookies, in which Krispy acquired majority stake a few years ago, continues to be a key growth driver.

Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!

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