Krispy Kreme third-quarter profit increases 43 percent

CHARLOTTE, N.C. -- Krispy Kreme Doughnuts Inc. reported a 43 percent rise in its third-quarter profit, meeting Wall Street's expectations as the snack-baker continued to open new stores.

Its shares surged nearly 5 percent in midday trading.

Based in Winston-Salem, Krispy Kreme said Friday it earned $14.5 million, or 23 cents a share, in the three months ended Nov. 2, up from $10.1 million, or 17 cents a share, in the same quarter last year.

Analysts surveyed by research firm Thomson First Call expected the company to earn 23 cents a share in the quarter.

"Our business momentum continues and our third quarter results reflect our focus on opening new stores, establishing strong off-premises relationships and gaining greater market share," said Scott Livengood, chairman, president and chief executive.

Revenue rose to $169.6 million from $129.1 million a year ago. Systemwide sales including those at franchise as well as company stores advanced 28.6 percent to $251.2 million in the third quarter, compared with $195.3 million in the same year-ago period.

Profits for the first nine months increased 46 percent to $40.7 million, or 66 cents a share, compared with $27.8 million, or 47 cents a share, in the same period last year.

New stores opened

Revenue rose to $480 million from $354.6 million a year earlier, Krispy Kreme opened 27 new company-owned stores and entered 10 new markets during the third quarter.

The company opened its first factory store in Europe, located in a Harrods department store in west London.

Krispy Kreme said it expects to earn 26 cents per share in the fourth quarter and 92 cents per share for the year. Analysts expected earnings of 26 cents a share for the quarter and 91 cents a share for the year.

Krispy Kreme operates 333 stores in 42 U.S. states, Canada, the United Kingdom and Australia.

In trading on the New York Stock Exchange (news - web sites), Krispy Kreme shares were up $1.90 to close at $40.60.

On the Net:

Krispy Kreme: www.krispykreme.com