Krispy Kreme enters the US market after five years of absence | IPO

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Tell Homer Simpson: Krispy Kreme plans to float the U.S. stock market after a five-year gap, with sales of its donuts soaring as customers heal during the pandemic.

The American company, which will be listed on the New York Nasdaq under the ticker “DNUT,” reported record earnings for last year on Tuesday – although they remained unprofitable.

Sales of Krispy Kreme’s Sweet Donuts jumped to $ 1.1 billion in 2020 – a 17% increase from 2019 – thanks in part to a shift to online deliveries. It was the first time that annual sales exceeded $ 1 billion (£ 700 million) in its 83-year history.

The trend continued in the first quarter of this year, with its stock market filing showing revenue up 23% to $ 321.8 million.

Krispy Kreme hopes to target its international expansion in a market of “indulgences” which it believes was worth $ 650 billion, as well as increase the frequency of repeat customers in the cupboards of supermarkets, notably Sainsbury’s and Asda in the UK, as well as than in its own stores. The stock file says “almost all consumers want an occasional indulgence.”

This desire existed “in good times as in bad times”, including during the pandemic, the company said. However, he added that the pandemic had dented his ability to make money despite the success of a promotion in March to give a free donut to anyone in the United States who has been vaccinated against Covid-19.

The company said, “We believe market conditions will remain very favorable as the long-standing demand from global consumers for a quality indulgence continues to grow. “

In the mandatory risk disclosures, Krispy Kreme pointed out that it could be vulnerable to changes in consumer tastes or litigation or regulations particularly related to food preferences. This could include the “perception that the practices of catering companies have contributed to the nutrition, calorie intake, obesity or other health issues of their guests,” he said.

The company sold 1.3 billion donuts in 30 countries in its fiscal year 2020. Almost two-thirds of those sales were its “original iced” sugar-coated variety, which contains 24g of sugars per 100g.

The company reported a net loss of $ 61 million for 2020 as it expanded, highlighting struggles of a different kind for a business that has changed owners several times over the past decades.

Krispy Kreme was founded in 1937 by Vernon Rudolph in North Carolina to supply donuts to grocery stores. It first went public in 2000, but was forced to file for bankruptcy five years later. In 2016, it was bought in $ 1.35 billion deal by an investment fund owned by JAB Holdings, an investment company owned by the wealthy German Reimann family who later bought the Pret a Manger sandwich chain.

The company’s first retail store didn’t open until 1989, but in 2015 it had its 1,000th opening. JAB oversaw a further expansion of Krispy Kreme’s operations, with revenues doubling between 2016 and 2020.

Krispy Kreme sells donuts at 5,000 outlets across the United States, including 295 from its own stores. In the United Kingdom, it operates 116 stores and nearly 1,200 cabinets.

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