Annual 1

Annual Report Analysis: Krispy Kreme Doughnuts Gillian Williams Professor ______ HTM 100 May 19, 2011

complementary beverages. As of January 30. which has the largest number of outlets in the doughnut retail industry and Tim Horton’s. The company was founded in 1937 in the small town of Winston-Salem. North Carolina with a secret yeast-raised doughnut recipe from a French chef. growth returned to Krispy Kreme’s domestic business. (NYS: KKD) is a hospitality company that specializes in selling high quality doughnuts. international franchise stores. The revenues . Krispy Kreme generates its revenues from four business segments: company owned stores. Provide a brief overview of the Chairman’s and CEO’s reports The Chairman’s and CEO’s reports discuss quite a few subjects. The report makes note that both Dunkin Donuts and Tim Horton’s have considerably greater financial resources than Krispy Kreme and that the competitors are trying to expand into Krispy Kreme’s traditional geographic areas. There are also regionally and locally owned doughnut shops and bakeries that are competitors on a smaller level. and there were 417 shops in 20 other countries around the world. The corner was turned in 2011 and for the year ending on January 30th. The first important aspect of the report is the overview of Krispy Kreme’s competitors in the same quick service restaurant arena: Dunkin Donuts. This is an important facet of the reports because recognizing competition and future influences on the market are crucial to future success. That is blamed on Krispy Kreme opening too many domestic stores in too short an amount of time.Annual 2 Krispy Kreme Doughnuts Inc. there were 229 Krispy Kreme stores operated domestically in 37 states and in the District of Columbia. Today. poor support and long-term strategic plans. leading to many of them closing due to insufficient business. domestic franchise stores. and assorted treats and other sweets. 2011. and the Krispy Kreme supply chain. Acknowledgement of the falling revenue from roughly 2004 through 2009 is clearly examined in the reports as well.

With that being said. By branding their doughnuts as a sweet indulgence. For example. Krispy Kreme believes that they are better insulated from the downturn than full service restaurants due to the fact that their prices are an affordable indulgence. The presentation of the doughnuts are critical wherever Krispy Kreme is sold and includes certain new doughnut designs in honor of . This leads to fewer visits out to restaurants and related growth. they become associated in a customer’s mind with happiness. One other aspect of the reports is that they recognize the role the economic downturn has had on the company. relatively high unemployment and low consumer confidence in Krispy Kreme’s domestic geographic areas have taken a toll on consumers and their ability to spend. Their ultimate goal is be the worldwide leader in the quick service doughnut market and provide their sweet treats to as many consumers as possible. the values state that consumers are the lifeblood of Krispy Kreme and there is no substitute for quality in service to those consumers.” The statement itself is quite simple and brief but allows it to be applicable to many aspects of the business with the ultimate goal of making the customer happy.Annual 3 from domestic customers and the total number of Krispy Kreme shops operating in the United States each rose for the first time since fiscal 2005. I believe it is also important to discuss the company’s values because Krispy Kreme keeps a strong link to its past and founder Vernon Rudolph. along with their coffee drinks and frozen beverages. Access the Mission Statement of the company in terms of how it aligns with what the company actually does Krispy Kreme’s Mission Statement is “To touch and enhance lives through the joy that is Krispy Kreme. The values extolls a belief in several ideals. Krispy Kreme’s doughnuts are their signature product and sold to customers around the world.

In the year ending January 30. Moving away from an aggressive investing strategy would serve Krispy Kreme well and provide a more steady. the company lost 9 million in investing and 10 million in financing. providing a detailed analysis of the annual report and other resources in support of your prediction Krispy Kreme’s future performance is dependent on its ability to distinguish itself from the competition and make strides into new geographical areas. supermarkets and retail stores. Krispy Kreme earned 21 million in cash from operations. The global economic crisis hit all segments of the population. The balance sheet shows the company had total assets of 170 million compared to 93 million in liabilities which is a strong and enviable position to be in. The Cash Flow statements tell a different story. Income Statement. Describe in detail the financial health of the company based on an examination of its Balance Sheet.Annual 4 holidays such as hearts for Valentine’s Day to encourage purchases. The income statement shows that Krispy Kreme had revenues in the amount of 361 million dollars in 2011 with a net income of roughly 7. coffee shops and snacks sold through convenience stores. if not consistent income. Their annual report recognizes this and describes its competitors as general retailers of doughnuts. though much of this is due to the international stores. Lastly. Additionally. and Cash Flow Statement As mentioned previously growth returned to the domestic side of Krispy Kreme in fiscal year 2011. however. including businesses and their investments so this is not a big surprise to see but it is something that should be controlled by making more conservative investing decisions. Krispy Kreme believes that the . the revenues from domestic customers and the total number of Krispy Kreme shops operating in the United States both rose for the first time since fiscal 2005.5 million dollars. Krispy Kreme’s values include never settling for second and always striving to be better. 2011. Predict the performance of the company in the next five years.

general regional and national economic conditions. . an even seasonality and weather conditions have all played a role in sales. a selection of teas. there have been a number of factors that influence sales by Krispy Kreme. Historically. None of these factors can be controlled by Krispy Kreme but the level of competition is only going to increase. they can have a bright and prosperous future in the long term. both in the doughnut category and in sweet goods generally. and fruit smoothies are all examples of products that Krispy Kreme should begin to offer in order to compliment the current selection of sweet treats.Annual 5 uniqueness of their Original Glazed doughnuts are the major factor that distinguishes the brand from competitors. Dunkin’ Donuts has already expressed the plan to expand more into areas traditionally dominated by Krispy Kreme like its home state of North Carolina and other southern states. There is a trend in the industry moving towards expanded fresh product offerings at convenience stores during morning and evening drive times which is a good idea for Krispy Kreme as well. I believe that if Krispy Kreme can take advantage of their signature product and stress the differences between their doughnuts and those from other sellers. Iced coffees. the level of competition. Consumer preferences and their amount of disposable income.

S. Krispy Kreme Doughnuts: Hot and Fresh. 2011) Krispy Kreme Doughnuts Inc: Committee.wsj.Annual 6 Reference Annual Report. (January .marketwatch. (May 4. Retrieved from http://www. Wall Street Journal.mergentonline. 2011) Krispy Kreme Doughnuts Corporation. MarketWatch. Krispy Kreme IPO: Bubble-icious. (May 4. (2011). Retrieved from http://www. 2011). Retrieved from Dunkin’ Donuts’ sugar-rush IPO. Retrieved from http://www. Dunkin’ Donuts IPO vs.

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