One of America's most beloved doughnut businesses plans to close 14 stores next year, just weeks after collaborating with McDonald's.
Krispy Kreme is synonymous with light, flaky sweetness, and the brand had a good 2022.
Krispy Kreme's Q3 revenue grew 10.1% year-over-year to $377.5 million. Donut brand netted $1.52 billion this year.
Krispy Kreme's CEO noted on a recent results conference, "We saw positive organic growth in every country."
Krispy Kreme also recently revealed intentions to offer donuts at select McDonald's shops in Kentucky and Indiana. Krispy Kreme's relationship with McDonald's is a big deal.
Curiously, the doughnut brand has also discreetly disclosed plans to shut other sites. Krispy Kreme closed eight stores earlier this year, alleging unprofitability.
The doughnut company will close two more underperforming outlets and 12 more in the near future.
"All of these stores have poor revenue and flat on negative EBITDA margins, and most are hubs without spokes," Krispy Kreme's global president, COO, and CFO, stated on the results call.
"In Q3, we shuttered eight stores. We'll shutter 12 more stores in the following months. We believe these 20 sites might close."
Krispy Kreme's business model is "hub-and-spoke." Most of the closing Krispy Kreme stores are hubs without spokes.
Krispy Kreme is bullish, especially given its new cooperation with McDonald's. "This is a test towards a worldwide partnership.
This possibility is why we remain optimistic in our long-term objective of 50,000 worldwide access points " added.