Cover Page
Cover Page - shares | 6 Months Ended | |
Jul. 02, 2023 | Aug. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 02, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40573 | |
Entity Registrant Name | Krispy Kreme, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 37-1701311 | |
Entity Address, Address Line One | 2116 Hawkins Street | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28203 | |
City Area Code | 800 | |
Local Phone Number | 457-4779 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Entity Trading Symbol | DNUT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 168,200,000 | |
Entity Central Index Key | 0001857154 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Total net revenues | $ 408,882 | $ 375,245 | $ 827,832 | $ 747,777 |
Product and distribution costs | 111,106 | 100,558 | 228,939 | 196,669 |
Operating expenses | 189,165 | 173,942 | 380,573 | 342,668 |
Selling, general and administrative expense | 62,582 | 51,754 | 124,050 | 105,465 |
Marketing expenses | 9,770 | 11,215 | 19,623 | 21,374 |
Pre-opening costs | 1,104 | 985 | 1,868 | 2,314 |
Other expenses/(income), net | 314 | 1,469 | (4,949) | (1,164) |
Depreciation and amortization expense | 29,196 | 27,814 | 57,135 | 55,655 |
Operating income | 5,645 | 7,508 | 20,593 | 24,796 |
Interest expense, net | 12,063 | 7,586 | 24,051 | 14,937 |
Other non-operating expense, net | 1,061 | 756 | 2,060 | 435 |
(Loss)/income before income taxes | (7,479) | (834) | (5,518) | 9,424 |
Income tax (benefit)/expense | (7,563) | 1,574 | (7,246) | 5,374 |
Net income/(loss) | 84 | (2,408) | 1,728 | 4,050 |
Net (loss)/income attributable to noncontrolling interest | (139) | 1,441 | 1,806 | 3,897 |
Net income/(loss) attributable to Krispy Kreme, Inc. | $ 223 | $ (3,849) | $ (78) | $ 153 |
Net income/(loss) per share: | ||||
Common stock — Basic (in dollars per share) | $ 0 | $ (0.02) | $ 0 | $ 0 |
Common stock — Diluted (in dollars per share) | $ 0 | $ (0.02) | $ 0 | $ 0 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 168,184,000 | 167,367,000 | 168,162,000 | 167,314,000 |
Diluted (in shares) | 170,659,000 | 167,367,000 | 168,162,000 | 167,314,000 |
Product sales | ||||
Total net revenues | $ 400,348 | $ 367,777 | $ 811,022 | $ 731,829 |
Royalties and other revenues | ||||
Total net revenues | $ 8,534 | $ 7,468 | $ 16,810 | $ 15,948 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income/(loss) | $ 84 | $ (2,408) | $ 1,728 | $ 4,050 | |
Other comprehensive income/(loss), net of income taxes: | |||||
Foreign currency translation adjustment | 9,294 | (37,513) | 20,386 | (36,179) | |
Unrealized income/(loss) on cash flow hedges, net of income taxes (1) | [1] | 472 | 2,872 | (2,495) | 17,106 |
Total other comprehensive income/(loss) | 9,766 | (34,641) | 17,891 | (19,073) | |
Comprehensive income/(loss) | 9,850 | (37,049) | 19,619 | (15,023) | |
Net (loss)/income attributable to noncontrolling interest | (139) | 1,441 | 1,806 | 3,897 | |
Foreign currency translation adjustment attributable to noncontrolling interest | 1,063 | (903) | 955 | (903) | |
Total comprehensive income attributable to noncontrolling interest | 924 | 538 | 2,761 | 2,994 | |
Comprehensive income/(loss) attributable to Krispy Kreme, Inc. | $ 8,926 | $ (37,587) | $ 16,858 | $ (18,017) | |
[1]Net of income tax (expense)/benefit of ($0.2 million) and $0.8 million for the quarter and two quarters ended July 2, 2023, respectively, and ($1.0 million) and ($5.7 million) for the quarter and two quarters ended July 3, 2022, respectively. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized income on cash flow hedges, tax expense (benefit) | $ (0.2) | $ (1) | $ 0.8 | $ (5.7) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 02, 2023 | Jan. 01, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 26,635 | $ 35,371 |
Restricted cash | 339 | 359 |
Accounts receivable, net | 49,381 | 51,089 |
Inventories | 33,977 | 46,239 |
Taxes receivable | 17,354 | 18,263 |
Prepaid expense and other current assets | 31,635 | 26,953 |
Total current assets | 159,321 | 178,274 |
Property and equipment, net | 492,233 | 472,358 |
Goodwill | 1,099,393 | 1,087,908 |
Other intangible assets, net | 960,094 | 966,088 |
Operating lease right of use asset, net | 443,277 | 417,381 |
Other assets | 19,826 | 26,528 |
Total assets | 3,174,144 | 3,148,537 |
Current liabilities: | ||
Current portion of long-term debt | 40,722 | 40,034 |
Current operating lease liabilities | 42,932 | 43,160 |
Accounts payable | 216,407 | 225,276 |
Accrued liabilities | 96,199 | 104,424 |
Structured payables | 50,447 | 103,575 |
Total current liabilities | 446,707 | 516,469 |
Long-term debt, less current portion | 814,476 | 739,052 |
Noncurrent operating lease liabilities | 439,103 | 412,759 |
Deferred income taxes, net | 134,130 | 143,124 |
Other long-term obligations and deferred credits | 33,453 | 38,258 |
Total liabilities | 1,867,869 | 1,849,662 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, $0.01 par value; 300,000 shares authorized as of both July 2, 2023 and January 1, 2023; 168,184 and 168,137 shares issued and outstanding as of July 2, 2023 and January 1, 2023, respectively | 1,682 | 1,681 |
Additional paid-in capital | 1,432,150 | 1,426,105 |
Shareholder note receivable | (3,809) | (4,813) |
Accumulated other comprehensive income/(loss), net of income tax | 7,784 | (9,151) |
Retained deficit | (229,340) | (217,490) |
Total shareholders’ equity attributable to Krispy Kreme, Inc. | 1,208,467 | 1,196,332 |
Noncontrolling interest | 97,808 | 102,543 |
Total shareholders’ equity | 1,306,275 | 1,298,875 |
Total liabilities and shareholders’ equity | $ 3,174,144 | $ 3,148,537 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jul. 02, 2023 | Jan. 01, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000 | 300,000 |
Common stock, shares issued (in shares) | 168,184 | 168,137 |
Common stock, shares outstanding (in shares) | 168,184 | 168,137 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Shareholder Note Receivable | Foreign Currency Translation Adjustment | Unrealized (Loss)/Income on Cash Flow Hedges | Unrealized Loss on Employee Benefit Plans | Retained (Deficit)/Earnings | Noncontrolling Interest | |
Beginning balance (in shares) at Jan. 02, 2022 | 167,251 | |||||||||
Beginning balance at Jan. 02, 2022 | $ 1,335,655 | $ 1,673 | $ 1,415,185 | $ (4,382) | $ 8,967 | $ (11,001) | $ (444) | $ (178,409) | $ 104,066 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 6,458 | 4,002 | 2,456 | |||||||
Other comprehensive income/(loss), before reclassifications | 13,058 | 1,334 | 11,724 | |||||||
Reclassification from AOCI | 2,510 | 2,510 | ||||||||
Capital contribution from shareholders, net of loans issued | 240 | (3) | 243 | |||||||
Share-based compensation | 5,041 | 5,041 | ||||||||
Purchase of shares by noncontrolling interest | 52 | (58) | 110 | |||||||
Dividends declared on common stock and equivalents | (5,855) | (5,855) | ||||||||
Distribution to noncontrolling interest | (1,362) | 21 | (1,383) | |||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld (in shares) | 46 | |||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld | (390) | (390) | ||||||||
Other | (15) | (2) | (14) | 1 | ||||||
Ending balance (in shares) at Apr. 03, 2022 | 167,297 | |||||||||
Ending balance at Apr. 03, 2022 | $ 1,355,392 | $ 1,673 | 1,419,831 | (4,190) | 10,301 | 3,233 | (444) | (180,261) | 105,249 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 | |||||||||
Beginning balance (in shares) at Jan. 02, 2022 | 167,251 | |||||||||
Beginning balance at Jan. 02, 2022 | $ 1,335,655 | $ 1,673 | 1,415,185 | (4,382) | 8,967 | (11,001) | (444) | (178,409) | 104,066 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 4,050 | |||||||||
Ending balance (in shares) at Jul. 03, 2022 | 167,428 | |||||||||
Ending balance at Jul. 03, 2022 | 1,308,982 | $ 1,674 | 1,420,410 | (4,573) | (26,309) | 6,106 | (444) | (189,970) | 102,088 | |
Beginning balance (in shares) at Apr. 03, 2022 | 167,297 | |||||||||
Beginning balance at Apr. 03, 2022 | 1,355,392 | $ 1,673 | 1,419,831 | (4,190) | 10,301 | 3,233 | (444) | (180,261) | 105,249 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (2,408) | (3,849) | 1,441 | |||||||
Other comprehensive income/(loss), before reclassifications | (36,502) | (36,610) | 1,011 | (903) | ||||||
Reclassification from AOCI | 1,861 | 1,861 | ||||||||
Capital contribution from shareholders, net of loans issued | (267) | (31) | (236) | |||||||
Share-based compensation | 5,452 | 5,452 | ||||||||
Purchase of shares by noncontrolling interest | 358 | (133) | 491 | |||||||
Dividends declared on common stock and equivalents | (5,860) | (5,860) | ||||||||
Distribution to noncontrolling interest | (8,134) | (3,944) | (4,190) | |||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld (in shares) | 131 | |||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld | (897) | $ 1 | (898) | |||||||
Other | (13) | (14) | 1 | |||||||
Ending balance (in shares) at Jul. 03, 2022 | 167,428 | |||||||||
Ending balance at Jul. 03, 2022 | $ 1,308,982 | $ 1,674 | 1,420,410 | (4,573) | (26,309) | 6,106 | (444) | (189,970) | 102,088 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 | |||||||||
Beginning balance (in shares) at Jan. 01, 2023 | 168,137 | 168,137 | ||||||||
Beginning balance at Jan. 01, 2023 | $ 1,298,875 | $ 1,681 | 1,426,105 | (4,813) | (23,028) | 14,251 | (374) | (217,490) | 102,543 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 1,644 | (301) | 1,945 | |||||||
Other comprehensive income/(loss), before reclassifications | 10,311 | 11,200 | (781) | (108) | ||||||
Reclassification from AOCI | (2,186) | (2,186) | ||||||||
Share-based compensation | 5,545 | 5,545 | ||||||||
Dividends declared on common stock and equivalents | [1] | (5,884) | (5,884) | |||||||
Distribution to noncontrolling interest | (1,139) | (1,139) | ||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld (in shares) | 39 | |||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld | 0 | $ 1 | (1) | |||||||
Other | (16) | (17) | 1 | |||||||
Ending balance (in shares) at Apr. 02, 2023 | 168,176 | |||||||||
Ending balance at Apr. 02, 2023 | $ 1,307,150 | $ 1,682 | 1,431,649 | (4,830) | (11,828) | 11,284 | (374) | (223,674) | 103,241 | |
Beginning balance (in shares) at Jan. 01, 2023 | 168,137 | 168,137 | ||||||||
Beginning balance at Jan. 01, 2023 | $ 1,298,875 | $ 1,681 | 1,426,105 | (4,813) | (23,028) | 14,251 | (374) | (217,490) | 102,543 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | $ 1,728 | |||||||||
Ending balance (in shares) at Jul. 02, 2023 | 168,184 | 168,184 | ||||||||
Ending balance at Jul. 02, 2023 | $ 1,306,275 | $ 1,682 | 1,432,150 | (3,809) | (3,598) | 11,756 | (374) | (229,340) | 97,808 | |
Beginning balance (in shares) at Apr. 02, 2023 | 168,176 | |||||||||
Beginning balance at Apr. 02, 2023 | 1,307,150 | $ 1,682 | 1,431,649 | (4,830) | (11,828) | 11,284 | (374) | (223,674) | 103,241 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | 84 | 223 | (139) | |||||||
Other comprehensive income/(loss), before reclassifications | 10,212 | 8,231 | 918 | 1,063 | ||||||
Reclassification from AOCI | (446) | (446) | ||||||||
Capital contribution from shareholders, net of loans issued | 631 | 0 | 631 | |||||||
Share-based compensation | 4,824 | 4,824 | ||||||||
Dividends declared on common stock and equivalents | (5,889) | (5,889) | ||||||||
Distribution to noncontrolling interest | (10,107) | (4,176) | 426 | (1) | (6,357) | |||||
Issuance of common stock upon settlement of RSUs, net of shares withheld (in shares) | 8 | |||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld | (147) | (147) | ||||||||
Other | $ (37) | (36) | ||||||||
Ending balance (in shares) at Jul. 02, 2023 | 168,184 | 168,184 | ||||||||
Ending balance at Jul. 02, 2023 | $ 1,306,275 | $ 1,682 | $ 1,432,150 | $ (3,809) | $ (3,598) | $ 11,756 | $ (374) | $ (229,340) | $ 97,808 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 | |||||||||
[1]Includes a $0.035 cash dividend per common share declared in the second quarter of fiscal 2023 and expected to be paid in the third quarter of fiscal 2023. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Parenthetical) (Unaudited) - $ / shares | 3 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Apr. 03, 2022 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 | $ 0.035 | $ 0.035 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2023 | Jul. 03, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 1,728 | $ 4,050 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 57,135 | 55,655 |
Deferred income taxes | (11,743) | (6,866) |
Loss on extinguishment of debt | 472 | 0 |
Impairment and lease termination charges | 7,808 | 1,991 |
Gain on disposal of property and equipment | (151) | (499) |
Gain on sale-leaseback | (9,646) | (2,374) |
Share-based compensation | 10,369 | 10,493 |
Change in accounts and notes receivable allowances | 372 | 193 |
Inventory write-off | 10,244 | 251 |
Settlement of interest rate swap derivatives | 7,657 | 0 |
Amortization related to settlement of interest rate swap derivatives | (4,379) | 0 |
Other | 996 | (733) |
Change in operating assets and liabilities, excluding foreign currency translation adjustments | (24,609) | (8,238) |
Net cash provided by operating activities | 46,253 | 53,923 |
CASH FLOWS USED FOR INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (54,290) | (51,460) |
Proceeds from sale-leaseback | 10,025 | 3,000 |
Other investing activities | 163 | 181 |
Net cash used for investing activities | (44,102) | (48,279) |
CASH FLOWS USED FOR FINANCING ACTIVITIES: | ||
Proceeds from the issuance of debt | 989,198 | 53,000 |
Repayment of long-term debt and lease obligations | (916,580) | (50,179) |
Payment of financing costs | (5,000) | 0 |
Proceeds from structured payables | 73,939 | 153,097 |
Payments on structured payables | (126,920) | (133,530) |
Payment of contingent consideration related to a business combination | 0 | (900) |
Capital contribution by shareholders, net of loans issued | 631 | (27) |
Payments of issuance costs in connection with IPO | 0 | (12,458) |
Proceeds from sale of noncontrolling interest in subsidiary | 0 | 410 |
Distribution to shareholders | (11,771) | (11,710) |
Payments for repurchase and retirement of common stock | (147) | (2,363) |
Distribution to noncontrolling interest | (11,246) | (9,496) |
Net cash used for financing activities | (7,896) | (14,156) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,011) | (4,473) |
Net decrease in cash, cash equivalents and restricted cash | (8,756) | (12,985) |
Cash, cash equivalents and restricted cash at beginning of period | 35,730 | 39,192 |
Cash, cash equivalents and restricted cash at end of period | 26,974 | 26,207 |
Supplemental schedule of non-cash investing and financing activities: | ||
Increase in accrual for property and equipment | 10,636 | 4,499 |
Stock issuance under shareholder notes | 0 | 324 |
Accrual for distribution to shareholders | (5,886) | (5,860) |
Reconciliation of cash, cash equivalents and restricted cash at end of period: | ||
Cash and cash equivalents | 26,635 | 25,796 |
Restricted cash | 339 | 411 |
Total cash, cash equivalents and restricted cash | $ 26,974 | $ 26,207 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 02, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business Krispy Kreme, Inc. (“KKI”) and its subsidiaries (collectively, the “Company” or “Krispy Kreme”) operates through its omni-channel business model to provide doughnut experiences and produce doughnuts for Doughnut Shops, Delivered Fresh Daily (“DFD”) outlets, and Ecommerce and delivery channels, expanding consumer access to the Krispy Kreme brand. The Company has three reportable operating segments: 1) U.S., which includes all Krispy Kreme Company-owned operations in the U.S. and Insomnia Cookies shops; 2) International, which includes all Krispy Kreme Company-owned operations in the U.K., Ireland, Australia, New Zealand, and Mexico; and 3) Market Development, which includes franchise operations across the globe, as well as Krispy Kreme Company-owned shops in Canada and Japan. Unallocated corporate costs are excluded from the Company’s measurement of segment performance. Basis of Presentation and Consolidation The Company operates and reports financial information on a 52 or 53-week year with the fiscal year ending on the Sunday closest to December 31. The data periods contained within fiscal years 2022 and 2023 will reflect the results of operations for the 52-week periods ended January 1, 2023 and December 31, 2023, respectively. The quarters ended July 2, 2023 and July 3, 2022 were both 13-week periods. The unaudited Condensed Consolidated Financial Statements include the accounts of KKI and subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these interim financial statements do not include all information and footnotes required under GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of operations, balance sheet, cash flows, and shareholders’ equity for the periods presented. All significant intercompany balances and transactions among KKI and subsidiaries have been eliminated in consolidation. Investments in entities over which the Company has the ability to exercise significant influence but which it does not control and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto as of and for the year ended January 1, 2023, included in the Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of January 1, 2023 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The results of operations for the quarter ended July 2, 2023 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending December 31, 2023. Noncontrolling interest in the Company’s Condensed Consolidated Financial Statements represents the interest in subsidiaries held by joint venture partners and employee shareholders. The joint venture partners hold noncontrolling interests in the Company’s consolidated subsidiaries, Awesome Doughnut, LLC (“Awesome Doughnut”), W.K.S. Krispy Kreme, LLC (“WKS Krispy Kreme”), and Krispy K Canada, Inc. (“KK Canada”). Employee shareholders hold noncontrolling interests in the consolidated subsidiaries Krispy Kreme Holding U.K. Ltd. (“KKUK”), Krispy Kreme Holdings Pty Ltd. (“KK Australia”), Krispy Kreme Mexico Holding S.A.P.I. de C.V. (“KK Mexico”), and Insomnia Cookies Holdings, LLC (“Insomnia Cookies”). Since the Company consolidates the financial statements of these subsidiaries, the noncontrolling owners’ share of each subsidiary’s net assets and results of operations are deducted and reported as noncontrolling interest on the Condensed Consolidated Balance Sheets and as net income attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations and comprehensive income attributable to noncontrolling interest in the Condensed Consolidated Statements of Comprehensive Income/(Loss). Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 1, “Description of Business and Summary of Significant Accounting Policies” to the Consolidated Financial Statements for the year ended January 1, 2023 included in the Annual Report on Form 10-K. There have been no material changes to the significant accounting policies during the quarter ended July 2, 2023. Reclassifications Segment information is prepared on the same basis that the Company’s management reviews financial information for operational decision-making purposes. Effective January 2, 2023, the Company realigned its segment reporting structure such that the Company-owned Canada business has moved from the U.S. and Canada reportable operating segment to the Market Development reportable operating segment. As a result, the U.S. and Canada reportable operating segment has been renamed to the U.S. reportable operating segment. All segment information has been restated to be consistent with current presentation. Exiting the Branded Sweet Treats Business During the quarter ended April 2, 2023, the Company made the decision to exit its pre-packaged Branded Sweet Treats business due in part to its dilutive impact on profit margins, as well as to allow the Company to focus on its fresh doughnuts business. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Significant Events and Transactions” included in Item 2 of Part I of this Quarterly Report on Form 10-Q for further information. |
Inventories
Inventories | 6 Months Ended |
Jul. 02, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of Inventories are as follows: July 2, 2023 January 1, 2023 Raw materials $ 18,984 $ 20,713 Work in progress 534 476 Finished goods and purchased merchandise (1) 14,459 25,050 Total inventories $ 33,977 $ 46,239 (1) During the quarter and two quarters ended July 2, 2023 the Company recognized inventory write-offs of $3.1 million and $10.2 million, respectively, primarily related to the decision to exit the Branded Sweet Treats business. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 6 Months Ended |
Jul. 02, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, net Goodwill Changes in the carrying amount of goodwill by reportable segment are as follows: U.S. International Market Development Total Balance as of January 1, 2023 $ 678,068 $ 262,882 $ 146,958 $ 1,087,908 Foreign currency impact — 11,158 327 11,485 Balance as of July 2, 2023 $ 678,068 $ 274,040 $ 147,285 $ 1,099,393 Other Intangible Assets, net Other intangible assets consist of the following: July 2, 2023 January 1, 2023 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade name $ 657,900 $ — $ 657,900 $ 657,900 $ — $ 657,900 Intangible assets with definite lives Franchise agreements 30,390 (10,019) 20,371 30,632 (9,372) 21,260 Customer relationships 15,000 (5,981) 9,019 15,000 (5,548) 9,452 Reacquired franchise rights (1) 395,687 (122,883) 272,804 383,002 (105,526) 277,476 Website development costs 6,500 (6,500) — 6,500 (6,500) — Total intangible assets with definite lives 447,577 (145,383) 302,194 435,134 (126,946) 308,188 Total intangible assets $ 1,105,477 $ (145,383) $ 960,094 $ 1,093,034 $ (126,946) $ 966,088 (1) Reacquired franchise rights include the impact of foreign currency fluctuations associated with the respective countries. |
Leases
Leases | 6 Months Ended |
Jul. 02, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company included the following amounts related to operating and finance lease assets and liabilities within the Condensed Consolidated Balance Sheets: As of July 2, 2023 January 1, 2023 Assets Classification Operating lease Operating lease right of use asset, net $ 443,277 $ 417,381 Finance lease Property and equipment, net 29,215 26,958 Total leased assets $ 472,492 $ 444,339 Liabilities Current Operating lease Current operating lease liabilities $ 42,932 $ 43,160 Finance lease Current portion of long-term debt 5,722 5,034 Noncurrent Operating lease Noncurrent operating lease liabilities 439,103 412,759 Finance lease Long-term debt, less current portion 29,372 27,549 Total leased liabilities $ 517,129 $ 488,502 Lease costs were as follows: Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 986 $ 413 $ 1,877 $ 977 Operating lease cost Operating expenses 22,185 21,774 44,575 43,657 Short-term lease cost Operating expenses 1,264 1,241 2,545 2,286 Variable lease costs Operating expenses 6,886 6,328 16,231 11,335 Sublease income Royalties and other revenues (35) (71) (70) (140) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 1,781 $ 1,359 $ 3,365 $ 1,943 Interest on lease liabilities Interest expense, net 491 496 1,064 941 Supplemental disclosures of cash flow information related to leases were as follows: Two Quarters Ended July 2, 2023 July 3, 2022 Other information Cash paid for leases: Operating cash flows for operating leases (1) $ 57,968 $ 51,147 Operating cash flows for finance leases 1,121 950 Financing cash flows for finance leases 3,632 1,679 Right of use assets obtained in exchange for new lease liabilities: Operating leases $ 43,895 $ 19,682 Finance leases 5,931 455 (1) Operating cash flows from operating leases include variable rent payments which are not included in the measurement of lease liabilities. Variable rent payments were $6.9 million and $16.2 million for the quarter and two quarters ended July 2, 2023, respectively, and $6.3 million and $11.3 million for the quarter and two quarters ended July 3, 2022, respectively. The Company recognized a net gain of $0.6 million included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations in the two quarters ended July 2, 2023, related to the termination of leases at certain Krispy Kreme shops in the U.S. where the Company had already recognized impairment of the corresponding right of use assets in a prior period. The Company recognized $1.4 million of lease termination charges included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations in the quarter and two quarters ended July 3, 2022, related to the decision to exit certain Krispy Kreme shops in the U.S. In the two quarters ended July 2, 2023, the Company completed a sale-leaseback transaction whereby it disposed of the land at one real estate property for proceeds of $10.0 million. The Company subsequently leased back the property, which is accounted for as an operating lease. The Company recognized a gain on sale of $9.6 million, which is included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations. |
Leases | Leases The Company included the following amounts related to operating and finance lease assets and liabilities within the Condensed Consolidated Balance Sheets: As of July 2, 2023 January 1, 2023 Assets Classification Operating lease Operating lease right of use asset, net $ 443,277 $ 417,381 Finance lease Property and equipment, net 29,215 26,958 Total leased assets $ 472,492 $ 444,339 Liabilities Current Operating lease Current operating lease liabilities $ 42,932 $ 43,160 Finance lease Current portion of long-term debt 5,722 5,034 Noncurrent Operating lease Noncurrent operating lease liabilities 439,103 412,759 Finance lease Long-term debt, less current portion 29,372 27,549 Total leased liabilities $ 517,129 $ 488,502 Lease costs were as follows: Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 986 $ 413 $ 1,877 $ 977 Operating lease cost Operating expenses 22,185 21,774 44,575 43,657 Short-term lease cost Operating expenses 1,264 1,241 2,545 2,286 Variable lease costs Operating expenses 6,886 6,328 16,231 11,335 Sublease income Royalties and other revenues (35) (71) (70) (140) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 1,781 $ 1,359 $ 3,365 $ 1,943 Interest on lease liabilities Interest expense, net 491 496 1,064 941 Supplemental disclosures of cash flow information related to leases were as follows: Two Quarters Ended July 2, 2023 July 3, 2022 Other information Cash paid for leases: Operating cash flows for operating leases (1) $ 57,968 $ 51,147 Operating cash flows for finance leases 1,121 950 Financing cash flows for finance leases 3,632 1,679 Right of use assets obtained in exchange for new lease liabilities: Operating leases $ 43,895 $ 19,682 Finance leases 5,931 455 (1) Operating cash flows from operating leases include variable rent payments which are not included in the measurement of lease liabilities. Variable rent payments were $6.9 million and $16.2 million for the quarter and two quarters ended July 2, 2023, respectively, and $6.3 million and $11.3 million for the quarter and two quarters ended July 3, 2022, respectively. The Company recognized a net gain of $0.6 million included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations in the two quarters ended July 2, 2023, related to the termination of leases at certain Krispy Kreme shops in the U.S. where the Company had already recognized impairment of the corresponding right of use assets in a prior period. The Company recognized $1.4 million of lease termination charges included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations in the quarter and two quarters ended July 3, 2022, related to the decision to exit certain Krispy Kreme shops in the U.S. In the two quarters ended July 2, 2023, the Company completed a sale-leaseback transaction whereby it disposed of the land at one real estate property for proceeds of $10.0 million. The Company subsequently leased back the property, which is accounted for as an operating lease. The Company recognized a gain on sale of $9.6 million, which is included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 02, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents assets and liabilities that are measured at fair value on a recurring basis as of July 2, 2023 and January 1, 2023: July 2, 2023 Level 1 Level 2 Assets: Interest rate derivatives $ — $ 3,855 Commodity derivatives — 130 Total Assets $ — $ 3,985 Liabilities: Foreign currency derivatives $ — $ 108 Total Liabilities $ — $ 108 January 1, 2023 Level 1 Level 2 Assets: 401(k) mirror plan assets $ 6 $ — Interest rate derivatives — 10,461 Commodity derivatives — 514 Total Assets $ 6 $ 10,975 Liabilities: Foreign currency derivatives $ — $ 170 Total Liabilities $ — $ 170 There were no assets nor liabilities measured using Level 3 inputs and no transfers of financial assets or liabilities among the levels within the fair value hierarchy during the two quarters ended July 2, 2023 and fiscal year ended January 1, 2023. The Company’s derivatives are valued using discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves and currency rates. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jul. 02, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Commodity Price Risk The Company uses forward contracts to protect against the effects of commodity price fluctuations in the cost of ingredients of its products, of which flour, sugar, and shortening are the most significant, and the cost of gasoline used by its delivery vehicles. Management has not designated these forward contracts as hedges. As of July 2, 2023 and January 1, 2023, the total notional amount of commodity derivatives was 1.5 million and 1.7 million gallons of gasoline, respectively. They were scheduled to mature between September 2023 and December 2024 and January 2023 and December 2024, respectively. As of July 2, 2023 and January 1, 2023, the Company recorded assets of $0.1 million and $0.5 million, respectively, related to the fair market values of its commodity derivatives. The settlement of commodity derivative contracts is reported in the Condensed Consolidated Statements of Cash Flows as a cash flow from operating activities. Interest Rate Risk The Company uses interest rate swaps to manage its exposure to interest rate volatility from its debt arrangements. Management has designated the swap agreements as cash flow hedges and recognized the changes in the fair value of these swaps in other comprehensive income. As of July 2, 2023 and January 1, 2023, the Company has recorded assets of $3.9 million and $10.5 million, respectively, related to the fair market values of its interest rate derivatives. The cash flows associated with the interest rate swaps are reflected in operating activities in the Condensed Consolidated Statements of Cash Flows, which is consistent with the classification as operating activities of the interest payments on the term loan. In the two quarters ended July 2, 2023, the Company cancelled certain interest rate swap agreements with an aggregate notional amount of $265.0 million, collecting $7.7 million in cash proceeds, and entered into new agreements with the same counterparties. The primary difference between these new agreements and the prior versions included the setting of a new payment rate on the fixed component of the swaps (4.38%). At the same time, the Company also amended the benchmark interest rate on the floating component of all $505.0 million hedged notional to one-month SOFR, corresponding to the new interest rate on its refinanced credit facility discussed in Note 8 , Long-Term Debt. Foreign Currency Exchange Rate Risk The Company is exposed to foreign currency risk primarily from its investments in consolidated subsidiaries that operate in Canada, the U.K., Ireland, Australia, New Zealand, Mexico, and Japan. In order to mitigate the impact of foreign exchange fluctuations on commercial and financial transactions with these subsidiaries, the Company enters into foreign exchange forward contracts. Management has not designated these forward contracts as hedges. As of July 2, 2023 and January 1, 2023, the total notional amount of foreign exchange derivatives was $55.7 million and $59.0 million, respectively. They matured in July 2023 and January 2023, respectively. The Company recorded liabilities of $0.1 million and $0.2 million as of July 2, 2023 and January 1, 2023, respectively, related to the fair market values of its foreign exchange derivatives. Quantitative Summary of Derivative Positions and Their Effect on Results of Operations The following tables present the fair values of derivative instruments included in the Condensed Consolidated Balance Sheets as of July 2, 2023 and January 1, 2023, for derivatives not designated as hedging instruments and derivatives designated as hedging instruments, respectively. The Company only has cash flow hedges that are designated as hedging instruments. Derivatives Fair Value Derivatives Not Designated as Hedging Instruments July 2, January 1, Balance Sheet Location Commodity derivatives $ 130 $ 514 Prepaid expense and other current assets Total Assets $ 130 $ 514 Foreign currency derivatives $ 108 $ 170 Accrued liabilities Total Liabilities $ 108 $ 170 Derivatives Fair Value Derivatives Designated as Hedging Instruments July 2, January 1, Balance Sheet Location Interest rate derivatives $ 3,855 $ 7,218 Prepaid expense and other current assets Interest rate derivatives — 3,243 Other assets Total Assets $ 3,855 $ 10,461 The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the quarters ended July 2, 2023 and July 3, 2022 is as follows: Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Designated as Hedging Instruments July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Location of Derivative Gain/(Loss) Recognized in Income Gain/(loss) on interest rate derivatives $ 446 $ (1,861) $ 2,632 $ (4,371) Interest expense, net $ 446 $ (1,861) $ 2,632 $ (4,371) Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Not Designated as Hedging Instruments July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Location of Derivative Gain/(Loss) Recognized in Income Gain/(loss) on foreign currency derivatives $ 986 $ 108 $ 62 $ (255) Other non-operating expense, net (Loss)/gain on commodity derivatives (266) (188) (384) 672 Other non-operating expense, net $ 720 $ (80) $ (322) $ 417 |
Vendor Finance Programs
Vendor Finance Programs | 6 Months Ended |
Jul. 02, 2023 | |
Payables and Accruals [Abstract] | |
Vendor Finance Programs | Vendor Finance Programs The following table presents liabilities related to vendor finance programs which the Company participates in as a buyer as of July 2, 2023 and January 1, 2023: July 2, 2023 January 1, 2023 Balance Sheet Location Supply chain financing programs $ 132,746 $ 159,426 Accounts payable Structured payables programs 50,447 103,575 Structured payables Total Liabilities $ 183,193 $ 263,001 Supply Chain Financing (“SCF”) Programs The Company has an agreement with a third-party administrator which allows participating vendors to track its payments, and if voluntarily elected by the vendor, to sell payment obligations from the Company to financial institutions as part of the SCF program. The Company’s typical payment terms for trade payables range up to 180 days outside of the SCF program, depending on the type of vendors and the nature of the supplies or services. For vendors under the SCF Program, the Company has established payable terms ranging up to, but not exceeding, 360 days. When participating vendors elect to sell one or more of the Company’s payment obligations, the Company’s rights and obligations to settle the payables on their contractual due date are not impacted. The Company has no economic or commercial interest in a vendor’s decision to enter into these agreements and the financial institutions do not provide the Company with incentives such as rebates or profit sharing under the SCF program. The Company agrees on commercial terms with vendors for the goods and services procured, which are consistent with payment terms observed at other peer companies in the industry, and as the terms are not impacted by the SCF program, such obligations are classified as Accounts payable on the Condensed Consolidated Balance Sheets and the associated cash flows are included in operating activities in the Condensed Consolidated Statements of Cash Flows. Structured Payables Programs The Company utilizes various card products issued by financial institutions to facilitate purchases of goods and services. By using these products, the Company may receive differing levels of rebates based on timing of repayment. The payment obligations under these card products are classified as Structured payables on the Condensed Consolidated Balance Sheets and the associated cash flows are included in financing activities in the Condensed Consolidated Statements of Cash Flows. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Jul. 02, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company’s long-term debt obligations consists of the following: July 2, 2023 January 1, 2023 2023 Facility — term loan $ 700,000 $ — 2023 Facility — revolving credit facility 125,000 — 2019 Facility — term loan — 586,250 2019 Facility — revolving credit facility — 162,500 Less: Debt issuance costs (4,896) (2,247) Finance lease obligations 35,094 32,583 Total long-term debt 855,198 779,086 Less: Current portion of long-term debt (40,722) (40,034) Long-term debt, less current portion $ 814,476 $ 739,052 2023 Secured Credit Facility In March 2023, the Company entered into a new credit agreement (the “2023 Facility”) consisting of a $300.0 million senior secured revolving credit facility and a term loan with a principal amount of $700.0 million. The 2023 Facility is secured by a first priority lien on substantially all of the Company’s personal property assets, certain real properties, and all of the Company’s domestic wholly-owned subsidiaries. The initial proceeds of the 2023 Facility were used, in part, to refinance the loans and commitments under the Company’s existing credit agreement (the “2019 Facility”), and thereupon terminate the 2019 Facility. The loans and commitments under the 2019 Facility were due to mature in June 2024, and the loans and commitments under the 2023 Facility will mature in March 2028. In addition to refinancing the loans and commitments under the 2019 Facility, loans made pursuant to the 2023 Facility may be used for general corporate purposes of the Company (including, but not limited to, financing working capital needs, capital expenditures, acquisitions, other investments, dividends, and stock repurchases) and for any other purpose not prohibited under the related loan documents. The terms of the 2023 Facility are substantially similar to those of the 2019 Facility, except for the maturity date and the benchmark interest rate. Borrowings under the 2023 Facility are generally subject to an interest rate of adjusted term SOFR plus a credit spread adjustment of 0.10% plus (i) 2.25% if the Company’s leverage ratio (as defined in the 2023 Facility) equals or exceeds 4.00 to 1.00, (ii) 2.00% if the Company’s leverage ratio is less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00, or (iii) 1.75% if the Company’s leverage ratio is less than 3.00 to 1.00. As of July 2, 2023 and January 1, 2023, the unhedged interest rate was 7.20% under the 2023 Facility and 4.44% under the 2019 Facility, respectively. The Company is required to make equal installments of 1.25% of the aggregate closing date principal amount of the term loans on the last day of each fiscal quarter (commencing with the second full fiscal quarter following the closing date). All remaining term loan and revolving loan balances are to be due five years from the closing date. The Company capitalized $7.5 million of debt issuance costs related to the 2023 Facility, $5.3 million of which is related to the term loan and $2.2 million related to the revolving credit facility. Additionally, the Company recognized $0.5 million expenses during the two quarters ended July 2, 2023 related to unamortized debt issuance costs from the 2019 Facility associated with extinguished lenders, which are included in Interest expense, net in the Condensed Consolidated Statements of Operations. Restrictions and Covenants The 2023 Facility requires the Company to meet a maximum leverage ratio financial test. The leverage ratio is required to be less than 5.00 to 1.00 as of the end of each quarterly Test Period (as defined in the 2023 Facility) through maturity in March 2028. The leverage ratio under the 2023 Facility is defined as the ratio of (a) Total Indebtedness (as defined in the 2023 Facility, which includes all debt and finance lease obligations) minus unrestricted cash and cash equivalents to (b) a defined calculation of Adjusted EBITDA (“2023 Facility Adjusted EBITDA”) for the most recently ended Test Period. The 2023 Facility Adjusted EBITDA for purposes of these restrictive covenants includes incremental adjustments beyond those included in the Company’s Adjusted EBITDA non-GAAP measure. Specifically, the 2023 Facility Adjusted EBITDA definition includes pro forma impact of EBITDA to be received from new shop openings and acquisitions for periods not yet in operation, certain acquisition related synergies and cost optimization activities, and incremental add-backs for pre-opening costs. The 2023 Facility also contains covenants which, among other things, generally limit (with certain exceptions): mergers, amalgamations, or consolidations; the incurrence of additional indebtedness (including guarantees); the incurrence of additional liens; the sale, assignment, lease, conveyance, or transfer of assets; certain investments; dividends and stock redemptions or repurchases in excess of certain amounts; transactions with affiliates; engaging in materially different lines of business; and other activities customarily restricted in such agreements. The 2023 Facility also prohibits the transfer of cash or other assets to the parent company, whether by dividend, loan, or otherwise, but provides for exceptions to enable the parent company to pay taxes, directors’ fees, and operating expenses, as well as exceptions to permit dividends in respect of the Company’s common stock and stock redemptions and repurchases, to the extent permitted by the 2023 Facility. Subject to certain exceptions, the borrowings under the 2023 Facility are collateralized by substantially all of the Company’s assets (including its equity interests in its subsidiaries). As of July 2, 2023 and January 1, 2023, the Company was in compliance with the financial and other covenants related to the 2023 Facility. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jul. 02, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) The Company and certain of its subsidiaries issue time-vested RSUs and PSUs under their respective executive ownership plans and long-term incentive plans. During the quarter ended July 2, 2023, the Company granted 2.1 million awards, of which 0.7 million were PSUs. The majority of new RSUs granted vest over a 60-month period subsequent to the grant date (with 60% vesting on the third anniversary of the grant date, 20% vesting on the fourth anniversary of the grant date, and 20% vesting at the end of the 60-month term). The new PSUs granted have one three The PSU vesting is contingent upon the achievement of certain performance objectives and the awards are subject to a requisite service period. If the Company meets targets for the performance objectives at the end of the performance cycle, the Company awards a resulting number of shares of its common stock to the award holders. The number of shares may be increased to a maximum threshold (up to 200% of the target threshold set at the grant date, for a majority of the awards) or reduced to a minimum threshold (a floor of zero) based on the achievement of these performance objectives in accordance with the terms established at the award’s grant date. The Company estimates the probability that the performance objectives will be achieved periodically and adjusts compensation expenses accordingly. The Company determines compensation expenses associated with the RSUs and PSUs based on an award’s grant date fair value, with expenses recognized on a straight-line basis over the requisite service period for the entire award. RSU and PSU activity under the Company’s various plans during the periods presented is as follows: (in thousands, except per share amounts) Non-vested shares outstanding at January 1, Granted Vested Forfeited Non-vested shares outstanding at July 2, KKI RSUs and PSUs 4,946 2,446 90 228 7,074 Weighted Average Grant Date Fair Value $ 14.23 14.82 13.02 14.82 $ 14.43 KKUK RSUs 60 — 50 3 7 Weighted Average Grant Date Fair Value $ 15.77 — 13.41 21.21 $ 29.80 Insomnia Cookies RSUs 38 — — 1 37 Weighted Average Grant Date Fair Value $ 101.54 — — 128.94 $ 100.73 KK Australia RSUs 354 — 169 — 185 Weighted Average Grant Date Fair Value $ 1.47 — 1.36 — $ 1.57 KK Mexico RSUs 60 — — 40 20 Weighted Average Grant Date Fair Value $ 33.08 — — 34.58 $ 30.18 The Company recorded total non-cash compensation expense related to RSUs and PSUs under the plans of $3.9 million and $8.6 million for the quarter and two quarters ended July 2, 2023, respectively, and $4.7 million and $8.9 million for the quarter and two quarters ended July 3, 2022, respectively, which is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The unrecognized compensation cost related to the unvested RSUs and PSUs and the weighted average period over which such cost is expected to be recognized are as follows: As of July 2, 2023 Unrecognized Compensation Cost Recognized Over a KKI $ 69,507 3.2 years KKUK 125 3.0 years Insomnia Cookies 1,898 2.2 years KK Australia 119 2.0 years KK Mexico 344 2.1 years The estimated fair value of restricted stock is calculated using a market approach (i.e., market multiple is used for the KKUK and Insomnia Cookies plans and an agreed-upon EBITDA buyout multiple is used for KK Australia and KK Mexico plans). Time-Vested Stock Options KKI issues time-vested stock options under its Omnibus Incentive Plan. The fair value of time-vested stock options was estimated on the date of grant using the Black-Scholes option pricing model. Share options outstanding at Share options outstanding at (in thousands, except per share amounts) January 1, Granted Exercised Forfeited or Expired July 2, KKI Options 2,569 424 — — 2,993 Weighted Average Grant Date Fair Value $ 6.10 4.72 — — $ 5.90 Weighted Average Exercise Price $ 14.61 12.45 — — $ 14.30 The Company recorded total non-cash compensation expense related to the time-vested stock options of $0.9 million and $1.8 million for the quarter and two quarters ended July 2, 2023, respectively, and $0.8 million and $1.6 million for the quarter and two quarters ended July 3, 2022, respectively, which is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The unrecognized compensation cost related to the unvested stock options and the weighted average period over which such cost is expected to be recognized are as follows: As of July 2, 2023 Unrecognized Compensation Cost Recognized Over a KKI $ 9,987 2.8 years |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 02, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim tax reporting, the Company estimates a worldwide annual effective tax rate and applies that rate to the year-to-date ordinary (loss)/income. The tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.The Company’s effective income tax rates were 101.1% and 131.3% for the quarter and two quarters ended July 2, 2023, respectively, and -188.7% and 57.0% for the quarter and two quarters ended July 3, 2022, respectively. The Company’s effective income tax rate for the quarter and two quarters ended July 2, 2023 differed from the respective statutory rates primarily due to the mix of income and taxes attributable to foreign jurisdictions, the recognition of previously unrecognized tax benefits, disallowed executive compensation expense, noncontrolling interest in domestic joint ventures, and a discrete tax benefit unrelated to ongoing operations. The Company’s effective income tax rate for the quarter and two quarters ended July 3, 2022 differed from the respective statutory rates primarily due to the mix of income and taxes attributable to foreign jurisdictions, disallowed executive compensation expense, a discrete tax benefit related to a legal accrual, and the recognition of previously unrecognized tax benefits |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 02, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Pending Litigation In March 2023, an employee filed a lawsuit on behalf of himself and all others similarly situated against the Company, alleging violations of the Illinois Biometric Information Privacy Act. The Company believes that it has meritorious defenses to the complaint and will vigorously defend against these claims. At this time the Company is unable to predict the outcome of this matter, the potential loss or range of loss associated with the resolution of this matter, if any, or any potential effect it may have on the Company or its operations. Other Legal Matters The Company also is engaged in various legal proceedings arising in the normal course of business. The Company maintains insurance policies against certain kinds of such claims and suits, including insurance policies for workers’ compensation and personal injury, all of which are subject to deductibles. While the ultimate outcome of these matters could differ from management’s expectations, management currently does not believe their resolution will have a material adverse effect on the Company’s Condensed Consolidated Financial Statements. Other Commitments and Contingencies |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jul. 02, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company has an equity ownership in three franchisees, KremeWorks USA, LLC (20% ownership), KremeWorks Canada, L.P. (25% ownership), and Krispy Kreme Doughnuts France SAS (“KK France”) (33% ownership), with an aggregate carrying value of $1.6 million and $1.9 million as of July 2, 2023 and January 1, 2023, respectively. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jul. 02, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenues Revenues are disaggregated as follows: Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Company Shops, DFD and Branded Sweet Treats $ 387,428 $ 354,551 $ 780,242 $ 706,385 Mix and equipment revenue from franchisees 12,920 13,226 30,780 25,444 Franchise royalties and other 8,534 7,468 16,810 15,948 Total net revenues $ 408,882 $ 375,245 $ 827,832 $ 747,777 Other revenues include advertising fund contributions from franchisees, rental income, development and franchise fees, and licensing royalties from Keurig related to Krispy Kreme brands coffee sales. Contract Balances Deferred revenue and related receivables are as follows: July 2, 2023 January 1, 2023 Balance Sheet Location Trade receivables, net of allowances of $419 and $282, respectively $ 42,148 $ 40,131 Accounts receivables, net Deferred revenue: Current $ 18,371 $ 19,417 Accrued liabilities Noncurrent 4,919 3,946 Other long-term obligations and deferred credits Total deferred revenue $ 23,290 $ 23,363 |
Net Earnings_(Loss) per Share
Net Earnings/(Loss) per Share | 6 Months Ended |
Jul. 02, 2023 | |
Earnings Per Share [Abstract] | |
Net Earnings/(Loss) per Share | Net Earnings/(Loss) per Share The following table presents the calculations of basic and diluted EPS: Quarter Ended Two Quarters Ended (in thousands, except per share amounts) July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Net income/(loss) attributable to Krispy Kreme, Inc. $ 223 $ (3,849) $ (78) $ 153 Adjustment to net income/(loss) attributable to common shareholders — — — (374) Net income/(loss) attributable to common shareholders - Basic $ 223 $ (3,849) $ (78) $ (221) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (4) (83) (7) (122) Net income/(loss) attributable to common shareholders - Diluted $ 219 $ (3,932) $ (85) $ (343) Basic weighted average common shares outstanding 168,184 167,367 168,162 167,314 Dilutive effect of outstanding common stock options, RSUs, and PSUs 2,475 — — — Diluted weighted average common shares outstanding 170,659 167,367 168,162 167,314 Earnings/(loss) per share attributable to common shareholders: Basic $ — $ (0.02) $ — $ — Diluted $ — $ (0.02) $ — $ — Potential dilutive shares consist of unvested RSUs and PSUs, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes certain unvested RSUs granted under certain subsidiaries’ executive ownership plans and long-term incentive plans, because their inclusion would have been antidilutive. The following table summarizes the gross number of potential dilutive unvested RSUs and PSUs excluded due to antidilution (unadjusted for the treasury stock method): Quarter Ended Two Quarters Ended (in thousands) July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 KKI 224 6,222 7,074 6,222 KKUK 7 — 7 — Insomnia Cookies 37 — 37 5 KK Australia — — 185 — KK Mexico — — — 1 For the quarter and two quarters ended July 2, 2023, as well as the quarter and two quarters ended July 3, 2022, all 3.0 million and 2.8 million time-vested stock options, respectively, were excluded from the computation of diluted weighted average common shares outstanding based on application of the treasury stock method. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jul. 02, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company conducts business through the three reportable segments: U.S., International, and Market Development. Unallocated corporate costs are excluded from the Company’s measurement of segment performance. These costs include general corporate expenses. As discussed in Note 1 , Description of Business and Summary of Significant Accounting Policies, effective January 2, 2023, the Company realigned its segment reporting structure such that the Company-owned Canada business has moved from the U.S. and Canada reportable operating segment to the Market Development reportable operating segment. As a result, the U.S. and Canada reportable operating segment has been renamed to the U.S. reportable operating segment. All segment information has been restated to be consistent with current presentation. The reportable segment results are as follows: Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Net revenues: U.S. $ 267,417 $ 244,665 $ 548,761 $ 492,584 International 98,332 93,853 188,620 181,054 Market Development 43,133 36,727 90,451 74,139 Total net revenues $ 408,882 $ 375,245 $ 827,832 $ 747,777 Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Segment Adjusted EBITDA: U.S. $ 28,085 $ 24,155 $ 66,620 $ 56,562 International 19,463 19,535 33,030 36,779 Market Development 15,734 12,357 32,700 24,845 Corporate (14,468) (8,686) (28,608) (21,918) Adjusted EBITDA 48,814 47,361 103,742 96,268 Interest expense, net 12,063 7,586 24,051 14,937 Income tax (benefit)/expense (7,563) 1,574 (7,246) 5,374 Depreciation and amortization expense 29,196 27,814 57,135 55,655 Share-based compensation 4,824 5,452 10,369 10,493 Employer payroll taxes related to share-based compensation 189 35 214 90 Other non-operating expense, net (1) 1,061 756 2,060 435 Strategic initiatives (2) 4,477 120 17,946 120 Acquisition and integration expenses (3) 339 82 430 599 New market penetration expenses (4) 241 260 335 370 Shop closure expenses, net (5) 1,484 1,894 805 2,124 Restructuring and severance expenses (6) 1,667 476 2,247 476 Gain on sale-leaseback 15 — (9,646) (2,374) Other (7) 737 3,720 3,314 3,919 Net income/(loss) $ 84 $ (2,408) $ 1,728 $ 4,050 (1) Primarily foreign translation gains and losses in each period. (2) The quarter and two quarters ended July 2, 2023 consist primarily of costs associated with the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs. (3) Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period. (4) Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including the Insomnia Cookies brand entering Canada and the U.K. (5) Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. (6) The quarter and two quarters ended July 2, 2023 consist primarily of costs associated with restructuring of the global executive teams. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 02, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The Company operates and reports financial information on a 52 or 53-week year with the fiscal year ending on the Sunday closest to December 31. The data periods contained within fiscal years 2022 and 2023 will reflect the results of operations for the 52-week periods ended January 1, 2023 and December 31, 2023, respectively. The quarters ended July 2, 2023 and July 3, 2022 were both 13-week periods.The unaudited Condensed Consolidated Financial Statements include the accounts of KKI and subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these interim financial statements do not include all information and footnotes required under GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of operations, balance sheet, cash flows, and shareholders’ equity for the periods presented. All significant intercompany balances and transactions among KKI and subsidiaries have been eliminated in consolidation. Investments in entities over which the Company has the ability to exercise significant influence but which it does not control and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. |
Consolidation | These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto as of and for the year ended January 1, 2023, included in the Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of January 1, 2023 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The results of operations for the quarter ended July 2, 2023 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending December 31, 2023. Noncontrolling interest in the Company’s Condensed Consolidated Financial Statements represents the interest in subsidiaries held by joint venture partners and employee shareholders. The joint venture partners hold noncontrolling interests in the Company’s consolidated subsidiaries, Awesome Doughnut, LLC (“Awesome Doughnut”), W.K.S. Krispy Kreme, LLC (“WKS Krispy Kreme”), and Krispy K Canada, Inc. (“KK Canada”). Employee shareholders hold noncontrolling interests in the consolidated subsidiaries Krispy Kreme Holding U.K. Ltd. (“KKUK”), Krispy Kreme Holdings Pty Ltd. (“KK Australia”), Krispy Kreme Mexico Holding S.A.P.I. de C.V. (“KK Mexico”), and Insomnia Cookies Holdings, LLC (“Insomnia Cookies”). Since the Company consolidates the financial statements of these subsidiaries, the noncontrolling owners’ share of each subsidiary’s net assets and results of operations are deducted and reported as noncontrolling interest on the Condensed Consolidated Balance Sheets and as net income attributable to noncontrolling interest in the Condensed Consolidated Statements of Operations and comprehensive income attributable to noncontrolling interest in the Condensed Consolidated Statements of Comprehensive Income/(Loss). |
Reclassifications | Reclassifications Segment information is prepared on the same basis that the Company’s management reviews financial information for operational decision-making purposes. Effective January 2, 2023, the Company realigned its segment reporting structure such that the Company-owned Canada business has moved from the U.S. and Canada reportable operating segment to the Market Development reportable operating segment. As a result, the U.S. and Canada reportable operating segment has been renamed to the U.S. reportable operating segment. All segment information has been restated to be consistent with current presentation. Exiting the Branded Sweet Treats Business During the quarter ended April 2, 2023, the Company made the decision to exit its pre-packaged Branded Sweet Treats business due in part to its dilutive impact on profit margins, as well as to allow the Company to focus on its fresh doughnuts business. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Significant Events and Transactions” included in Item 2 of Part I of this Quarterly Report on Form 10-Q for further information. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. It was effective for all entities as of March 12, 2020 through December 31, 2022. A company may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform by delaying the effective date of the guidance issued in ASU 2020-04 to December 31, 2024. As described in Note 8 , Long-Term Debt, during the quarter ended April 2, 2023 the Company refinanced its debt with interest to be calculated prospectively with reference to the Secured Overnight Financing Rate (“SOFR”), and accordingly adopted this standard, which did not impact the financial statements presented herein. In September 2022, the FASB issued ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which requires certain disclosures be made by a buyer in a supplier finance program, including the key terms of the program and, for the obligations that the buyer has confirmed as valid to the finance provider, the amount outstanding that remains unpaid by the buyer as of the end of the fiscal period, a description of where those obligations are presented in the balance sheet, and a rollforward of those obligations during the fiscal period. It is effective for all entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. As such, the Company adopted this standard in the quarter ended April 2, 2023 and has disclosed the required information in Note 7 , Vendor Finance Programs, other than the rollforward information which is not effective until fiscal years beginning after December 15, 2023. The Company is currently evaluating the effect of the new guidance on its annual disclosures. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of Inventories are as follows: July 2, 2023 January 1, 2023 Raw materials $ 18,984 $ 20,713 Work in progress 534 476 Finished goods and purchased merchandise (1) 14,459 25,050 Total inventories $ 33,977 $ 46,239 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill by Reportable Segment | Changes in the carrying amount of goodwill by reportable segment are as follows: U.S. International Market Development Total Balance as of January 1, 2023 $ 678,068 $ 262,882 $ 146,958 $ 1,087,908 Foreign currency impact — 11,158 327 11,485 Balance as of July 2, 2023 $ 678,068 $ 274,040 $ 147,285 $ 1,099,393 |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consist of the following: July 2, 2023 January 1, 2023 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade name $ 657,900 $ — $ 657,900 $ 657,900 $ — $ 657,900 Intangible assets with definite lives Franchise agreements 30,390 (10,019) 20,371 30,632 (9,372) 21,260 Customer relationships 15,000 (5,981) 9,019 15,000 (5,548) 9,452 Reacquired franchise rights (1) 395,687 (122,883) 272,804 383,002 (105,526) 277,476 Website development costs 6,500 (6,500) — 6,500 (6,500) — Total intangible assets with definite lives 447,577 (145,383) 302,194 435,134 (126,946) 308,188 Total intangible assets $ 1,105,477 $ (145,383) $ 960,094 $ 1,093,034 $ (126,946) $ 966,088 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following: July 2, 2023 January 1, 2023 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade name $ 657,900 $ — $ 657,900 $ 657,900 $ — $ 657,900 Intangible assets with definite lives Franchise agreements 30,390 (10,019) 20,371 30,632 (9,372) 21,260 Customer relationships 15,000 (5,981) 9,019 15,000 (5,548) 9,452 Reacquired franchise rights (1) 395,687 (122,883) 272,804 383,002 (105,526) 277,476 Website development costs 6,500 (6,500) — 6,500 (6,500) — Total intangible assets with definite lives 447,577 (145,383) 302,194 435,134 (126,946) 308,188 Total intangible assets $ 1,105,477 $ (145,383) $ 960,094 $ 1,093,034 $ (126,946) $ 966,088 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | The Company included the following amounts related to operating and finance lease assets and liabilities within the Condensed Consolidated Balance Sheets: As of July 2, 2023 January 1, 2023 Assets Classification Operating lease Operating lease right of use asset, net $ 443,277 $ 417,381 Finance lease Property and equipment, net 29,215 26,958 Total leased assets $ 472,492 $ 444,339 Liabilities Current Operating lease Current operating lease liabilities $ 42,932 $ 43,160 Finance lease Current portion of long-term debt 5,722 5,034 Noncurrent Operating lease Noncurrent operating lease liabilities 439,103 412,759 Finance lease Long-term debt, less current portion 29,372 27,549 Total leased liabilities $ 517,129 $ 488,502 |
Schedule of Lease Costs and Supplemental Cash Flow Information Related to Leases | Lease costs were as follows: Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 986 $ 413 $ 1,877 $ 977 Operating lease cost Operating expenses 22,185 21,774 44,575 43,657 Short-term lease cost Operating expenses 1,264 1,241 2,545 2,286 Variable lease costs Operating expenses 6,886 6,328 16,231 11,335 Sublease income Royalties and other revenues (35) (71) (70) (140) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 1,781 $ 1,359 $ 3,365 $ 1,943 Interest on lease liabilities Interest expense, net 491 496 1,064 941 Supplemental disclosures of cash flow information related to leases were as follows: Two Quarters Ended July 2, 2023 July 3, 2022 Other information Cash paid for leases: Operating cash flows for operating leases (1) $ 57,968 $ 51,147 Operating cash flows for finance leases 1,121 950 Financing cash flows for finance leases 3,632 1,679 Right of use assets obtained in exchange for new lease liabilities: Operating leases $ 43,895 $ 19,682 Finance leases 5,931 455 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents assets and liabilities that are measured at fair value on a recurring basis as of July 2, 2023 and January 1, 2023: July 2, 2023 Level 1 Level 2 Assets: Interest rate derivatives $ — $ 3,855 Commodity derivatives — 130 Total Assets $ — $ 3,985 Liabilities: Foreign currency derivatives $ — $ 108 Total Liabilities $ — $ 108 January 1, 2023 Level 1 Level 2 Assets: 401(k) mirror plan assets $ 6 $ — Interest rate derivatives — 10,461 Commodity derivatives — 514 Total Assets $ 6 $ 10,975 Liabilities: Foreign currency derivatives $ — $ 170 Total Liabilities $ — $ 170 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Condensed Consolidated Balance Sheets, Fair Value | The following tables present the fair values of derivative instruments included in the Condensed Consolidated Balance Sheets as of July 2, 2023 and January 1, 2023, for derivatives not designated as hedging instruments and derivatives designated as hedging instruments, respectively. The Company only has cash flow hedges that are designated as hedging instruments. Derivatives Fair Value Derivatives Not Designated as Hedging Instruments July 2, January 1, Balance Sheet Location Commodity derivatives $ 130 $ 514 Prepaid expense and other current assets Total Assets $ 130 $ 514 Foreign currency derivatives $ 108 $ 170 Accrued liabilities Total Liabilities $ 108 $ 170 Derivatives Fair Value Derivatives Designated as Hedging Instruments July 2, January 1, Balance Sheet Location Interest rate derivatives $ 3,855 $ 7,218 Prepaid expense and other current assets Interest rate derivatives — 3,243 Other assets Total Assets $ 3,855 $ 10,461 |
Schedule of Derivative Instruments in Condensed Consolidated Statements of Operations, Gain (Loss) | The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the quarters ended July 2, 2023 and July 3, 2022 is as follows: Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Designated as Hedging Instruments July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Location of Derivative Gain/(Loss) Recognized in Income Gain/(loss) on interest rate derivatives $ 446 $ (1,861) $ 2,632 $ (4,371) Interest expense, net $ 446 $ (1,861) $ 2,632 $ (4,371) Derivative Gain/(Loss) Recognized in Income for the Quarter Ended Derivative Gain/(Loss) Recognized in Income for the Two Quarters Ended Derivatives Not Designated as Hedging Instruments July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Location of Derivative Gain/(Loss) Recognized in Income Gain/(loss) on foreign currency derivatives $ 986 $ 108 $ 62 $ (255) Other non-operating expense, net (Loss)/gain on commodity derivatives (266) (188) (384) 672 Other non-operating expense, net $ 720 $ (80) $ (322) $ 417 |
Vendor Finance Programs (Tables
Vendor Finance Programs (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Payables and Accruals [Abstract] | |
Liabilities Related to Vendor Finance Programs | The following table presents liabilities related to vendor finance programs which the Company participates in as a buyer as of July 2, 2023 and January 1, 2023: July 2, 2023 January 1, 2023 Balance Sheet Location Supply chain financing programs $ 132,746 $ 159,426 Accounts payable Structured payables programs 50,447 103,575 Structured payables Total Liabilities $ 183,193 $ 263,001 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Jul. 02, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The Company’s long-term debt obligations consists of the following: July 2, 2023 January 1, 2023 2023 Facility — term loan $ 700,000 $ — 2023 Facility — revolving credit facility 125,000 — 2019 Facility — term loan — 586,250 2019 Facility — revolving credit facility — 162,500 Less: Debt issuance costs (4,896) (2,247) Finance lease obligations 35,094 32,583 Total long-term debt 855,198 779,086 Less: Current portion of long-term debt (40,722) (40,034) Long-term debt, less current portion $ 814,476 $ 739,052 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | RSU and PSU activity under the Company’s various plans during the periods presented is as follows: (in thousands, except per share amounts) Non-vested shares outstanding at January 1, Granted Vested Forfeited Non-vested shares outstanding at July 2, KKI RSUs and PSUs 4,946 2,446 90 228 7,074 Weighted Average Grant Date Fair Value $ 14.23 14.82 13.02 14.82 $ 14.43 KKUK RSUs 60 — 50 3 7 Weighted Average Grant Date Fair Value $ 15.77 — 13.41 21.21 $ 29.80 Insomnia Cookies RSUs 38 — — 1 37 Weighted Average Grant Date Fair Value $ 101.54 — — 128.94 $ 100.73 KK Australia RSUs 354 — 169 — 185 Weighted Average Grant Date Fair Value $ 1.47 — 1.36 — $ 1.57 KK Mexico RSUs 60 — — 40 20 Weighted Average Grant Date Fair Value $ 33.08 — — 34.58 $ 30.18 |
Share-based Payment Arrangement, Nonvested Award, Cost | The unrecognized compensation cost related to the unvested RSUs and PSUs and the weighted average period over which such cost is expected to be recognized are as follows: As of July 2, 2023 Unrecognized Compensation Cost Recognized Over a KKI $ 69,507 3.2 years KKUK 125 3.0 years Insomnia Cookies 1,898 2.2 years KK Australia 119 2.0 years KK Mexico 344 2.1 years The unrecognized compensation cost related to the unvested stock options and the weighted average period over which such cost is expected to be recognized are as follows: As of July 2, 2023 Unrecognized Compensation Cost Recognized Over a KKI $ 9,987 2.8 years |
Share-based Payment Arrangement, Option, Activity | A summary of the status of the time-vested stock options as of January 1, 2023 and changes during the first two quarters of fiscal 2023 is presented below: Share options outstanding at Share options outstanding at (in thousands, except per share amounts) January 1, Granted Exercised Forfeited or Expired July 2, KKI Options 2,569 424 — — 2,993 Weighted Average Grant Date Fair Value $ 6.10 4.72 — — $ 5.90 Weighted Average Exercise Price $ 14.61 12.45 — — $ 14.30 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues are disaggregated as follows: Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Company Shops, DFD and Branded Sweet Treats $ 387,428 $ 354,551 $ 780,242 $ 706,385 Mix and equipment revenue from franchisees 12,920 13,226 30,780 25,444 Franchise royalties and other 8,534 7,468 16,810 15,948 Total net revenues $ 408,882 $ 375,245 $ 827,832 $ 747,777 |
Summary of Contract Balances with Customers | Deferred revenue and related receivables are as follows: July 2, 2023 January 1, 2023 Balance Sheet Location Trade receivables, net of allowances of $419 and $282, respectively $ 42,148 $ 40,131 Accounts receivables, net Deferred revenue: Current $ 18,371 $ 19,417 Accrued liabilities Noncurrent 4,919 3,946 Other long-term obligations and deferred credits Total deferred revenue $ 23,290 $ 23,363 |
Net Earnings_(Loss) per Share (
Net Earnings/(Loss) per Share (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following table presents the calculations of basic and diluted EPS: Quarter Ended Two Quarters Ended (in thousands, except per share amounts) July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Net income/(loss) attributable to Krispy Kreme, Inc. $ 223 $ (3,849) $ (78) $ 153 Adjustment to net income/(loss) attributable to common shareholders — — — (374) Net income/(loss) attributable to common shareholders - Basic $ 223 $ (3,849) $ (78) $ (221) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (4) (83) (7) (122) Net income/(loss) attributable to common shareholders - Diluted $ 219 $ (3,932) $ (85) $ (343) Basic weighted average common shares outstanding 168,184 167,367 168,162 167,314 Dilutive effect of outstanding common stock options, RSUs, and PSUs 2,475 — — — Diluted weighted average common shares outstanding 170,659 167,367 168,162 167,314 Earnings/(loss) per share attributable to common shareholders: Basic $ — $ (0.02) $ — $ — Diluted $ — $ (0.02) $ — $ — |
Schedule of Antidilutive Unvested RSUs Excluded from Computation of Net Loss per Share | The following table summarizes the gross number of potential dilutive unvested RSUs and PSUs excluded due to antidilution (unadjusted for the treasury stock method): Quarter Ended Two Quarters Ended (in thousands) July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 KKI 224 6,222 7,074 6,222 KKUK 7 — 7 — Insomnia Cookies 37 — 37 5 KK Australia — — 185 — KK Mexico — — — 1 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jul. 02, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The reportable segment results are as follows: Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Net revenues: U.S. $ 267,417 $ 244,665 $ 548,761 $ 492,584 International 98,332 93,853 188,620 181,054 Market Development 43,133 36,727 90,451 74,139 Total net revenues $ 408,882 $ 375,245 $ 827,832 $ 747,777 Quarter Ended Two Quarters Ended July 2, 2023 July 3, 2022 July 2, 2023 July 3, 2022 Segment Adjusted EBITDA: U.S. $ 28,085 $ 24,155 $ 66,620 $ 56,562 International 19,463 19,535 33,030 36,779 Market Development 15,734 12,357 32,700 24,845 Corporate (14,468) (8,686) (28,608) (21,918) Adjusted EBITDA 48,814 47,361 103,742 96,268 Interest expense, net 12,063 7,586 24,051 14,937 Income tax (benefit)/expense (7,563) 1,574 (7,246) 5,374 Depreciation and amortization expense 29,196 27,814 57,135 55,655 Share-based compensation 4,824 5,452 10,369 10,493 Employer payroll taxes related to share-based compensation 189 35 214 90 Other non-operating expense, net (1) 1,061 756 2,060 435 Strategic initiatives (2) 4,477 120 17,946 120 Acquisition and integration expenses (3) 339 82 430 599 New market penetration expenses (4) 241 260 335 370 Shop closure expenses, net (5) 1,484 1,894 805 2,124 Restructuring and severance expenses (6) 1,667 476 2,247 476 Gain on sale-leaseback 15 — (9,646) (2,374) Other (7) 737 3,720 3,314 3,919 Net income/(loss) $ 84 $ (2,408) $ 1,728 $ 4,050 (1) Primarily foreign translation gains and losses in each period. (2) The quarter and two quarters ended July 2, 2023 consist primarily of costs associated with the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs. (3) Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period. (4) Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including the Insomnia Cookies brand entering Canada and the U.K. (5) Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. (6) The quarter and two quarters ended July 2, 2023 consist primarily of costs associated with restructuring of the global executive teams. (7) The quarter and two quarters ended July 2, 2023 and July 3, 2022 consist primarily of legal and other regulatory expenses incurred outside the ordinary course of business. The regulatory expenses incurred in the quarter ended April 2, 2023 relate to business acquisitions. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jul. 02, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 02, 2023 | Jan. 01, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 18,984 | $ 20,713 |
Work in progress | 534 | 476 |
Finished goods and purchased merchandise (1) | 14,459 | 25,050 |
Inventories | $ 33,977 | $ 46,239 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 02, 2023 | Jul. 02, 2023 | Jul. 03, 2022 | |
Inventory Disclosure [Abstract] | |||
Inventory write-off | $ 3,100 | $ 10,244 | $ 251 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jul. 02, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,087,908 |
Foreign currency impact | 11,485 |
Ending balance | 1,099,393 |
U.S. | |
Goodwill [Roll Forward] | |
Beginning balance | 678,068 |
Foreign currency impact | 0 |
Ending balance | 678,068 |
International | |
Goodwill [Roll Forward] | |
Beginning balance | 262,882 |
Foreign currency impact | 11,158 |
Ending balance | 274,040 |
Market Development | |
Goodwill [Roll Forward] | |
Beginning balance | 146,958 |
Foreign currency impact | 327 |
Ending balance | $ 147,285 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | Jan. 01, 2023 | |
Intangible assets with definite lives | |||||
Gross Carrying Amount | $ 447,577 | $ 447,577 | $ 435,134 | ||
Accumulated Amortization | (145,383) | (145,383) | (126,946) | ||
Net Amount | 302,194 | 302,194 | 308,188 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Gross Carrying Amount | 1,105,477 | 1,105,477 | 1,093,034 | ||
Accumulated Amortization | (145,383) | (145,383) | (126,946) | ||
Net Amount | 960,094 | 960,094 | 966,088 | ||
Amortization of intangible assets | 7,300 | $ 7,000 | 14,600 | $ 14,200 | |
Trade name | |||||
Intangible assets with indefinite lives | |||||
Trade name | 657,900 | 657,900 | 657,900 | ||
Franchise agreements | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 30,390 | 30,390 | 30,632 | ||
Accumulated Amortization | (10,019) | (10,019) | (9,372) | ||
Net Amount | 20,371 | 20,371 | 21,260 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | (10,019) | (10,019) | (9,372) | ||
Customer relationships | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 15,000 | 15,000 | 15,000 | ||
Accumulated Amortization | (5,981) | (5,981) | (5,548) | ||
Net Amount | 9,019 | 9,019 | 9,452 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | (5,981) | (5,981) | (5,548) | ||
Reacquired franchise rights (1) | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 395,687 | 395,687 | 383,002 | ||
Accumulated Amortization | (122,883) | (122,883) | (105,526) | ||
Net Amount | 272,804 | 272,804 | 277,476 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | (122,883) | (122,883) | (105,526) | ||
Website development costs | |||||
Intangible assets with definite lives | |||||
Gross Carrying Amount | 6,500 | 6,500 | 6,500 | ||
Accumulated Amortization | (6,500) | (6,500) | (6,500) | ||
Net Amount | 0 | 0 | 0 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated Amortization | $ (6,500) | $ (6,500) | $ (6,500) |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Jul. 02, 2023 | Jan. 01, 2023 |
Assets | ||
Operating lease | $ 443,277 | $ 417,381 |
Finance lease | $ 29,215 | $ 26,958 |
Finance lease assets, statement of financial position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Total leased assets | $ 472,492 | $ 444,339 |
Current | ||
Current operating lease liabilities | 42,932 | 43,160 |
Current finance lease liabilities | $ 5,722 | $ 5,034 |
Finance lease liabilities, current, statement of financial position [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Noncurrent | ||
Noncurrent operating lease liabilities | $ 439,103 | $ 412,759 |
Noncurrent finance lease liabilities | $ 29,372 | $ 27,549 |
Finance lease liabilities, noncurrent, statement of financial position [Extensible Enumeration] | Long-term debt, less current portion | Long-term debt, less current portion |
Total leased liabilities | $ 517,129 | $ 488,502 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Operating lease cost | ||||
Short-term lease cost | $ 1,264 | $ 1,241 | $ 2,545 | $ 2,286 |
Variable lease costs | 6,886 | 6,328 | 16,231 | 11,335 |
Sublease income | (35) | (71) | (70) | (140) |
Amortization of right of use assets | 1,781 | 1,359 | 3,365 | 1,943 |
Interest on lease liabilities | 491 | 496 | 1,064 | 941 |
Selling, general and administrative expense | ||||
Operating lease cost | ||||
Operating lease cost | 986 | 413 | 1,877 | 977 |
Operating expenses | ||||
Operating lease cost | ||||
Operating lease cost | $ 22,185 | $ 21,774 | $ 44,575 | $ 43,657 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Cash paid for leases: | ||||
Operating cash flows for operating leases | $ 57,968 | $ 51,147 | ||
Operating cash flows for finance leases | 1,121 | 950 | ||
Financing cash flows for finance leases | 3,632 | 1,679 | ||
Right of use assets obtained in exchange for new lease liabilities: | ||||
Operating leases | 43,895 | 19,682 | ||
Finance leases | 5,931 | 455 | ||
Variable lease, payment | $ 6,900 | $ 6,300 | $ 16,200 | $ 11,300 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 USD ($) property | Jul. 02, 2023 USD ($) property | Jul. 03, 2022 USD ($) | Jul. 02, 2023 USD ($) property | Jul. 03, 2022 USD ($) | |
Leases [Abstract] | |||||
Leases, termination costs | $ 1,400 | $ 600 | $ 1,400 | ||
Number of real estate properties | property | 1 | 1 | 1 | ||
Proceeds from sale-leaseback | $ 3,000 | $ 10,025 | 3,000 | ||
Gain on sale-leaseback | $ 2,600 | $ (15) | $ 0 | $ 9,646 | $ 2,374 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair value, recurring - USD ($) | Jul. 02, 2023 | Jan. 01, 2023 |
Level 1 | ||
Assets: | ||
401(k) mirror plan assets | $ 6,000 | |
Total Assets | $ 0 | 6,000 |
Liabilities: | ||
Total Liabilities | 0 | 0 |
Level 1 | Interest rate derivatives | ||
Assets: | ||
Derivative assets | 0 | |
Level 1 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 0 | 0 |
Level 1 | Foreign currency derivatives | ||
Assets: | ||
Derivative assets | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
401(k) mirror plan assets | 0 | |
Total Assets | 3,985,000 | 10,975,000 |
Liabilities: | ||
Total Liabilities | 108,000 | 170,000 |
Level 2 | Interest rate derivatives | ||
Assets: | ||
Derivative assets | 3,855,000 | 10,461,000 |
Level 2 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 130,000 | 514,000 |
Level 2 | Foreign currency derivatives | ||
Liabilities: | ||
Derivative liabilities | 108,000 | 170,000 |
Level 3 | ||
Assets: | ||
Total Assets | $ 0 | $ 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) $ in Thousands, gal in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2023 USD ($) gal | Jan. 01, 2023 USD ($) gal | Jul. 02, 2023 USD ($) | Jul. 02, 2023 USD ($) | Jul. 03, 2022 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Settlement of interest rate swap derivatives | $ 7,700 | $ 7,657 | $ 0 | ||
2023 Facility | Term Loan | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, amount of hedged item | $ 505,000 | 505,000 | 505,000 | ||
Derivatives Not Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative asset, fair value | 130 | $ 514 | 130 | 130 | |
Derivative liability, fair value | 108 | 170 | 108 | 108 | |
Derivatives Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative asset, fair value | $ 3,855 | $ 10,461 | 3,855 | 3,855 | |
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount (in gallon) | gal | 1.5 | 1.7 | |||
Derivative asset, fair value | $ 100 | $ 500 | 100 | 100 | |
Interest rate derivatives | Derivatives Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 265,000 | 265,000 | 265,000 | ||
Interest rate derivatives | Derivatives Designated as Hedging Instruments | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative asset, fair value | 3,900 | 10,500 | 3,900 | 3,900 | |
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability, fair value | 100 | 200 | 100 | 100 | |
Derivative, notional amount | $ 55,700 | $ 59,000 | $ 55,700 | $ 55,700 | |
Interest Rate Contract, New Interest Rate Swap Agreement | Derivatives Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, fixed interest rate | 4.38% | 4.38% | 4.38% |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments in Condensed Consolidated Balance Sheets, Fair Value (Details) - USD ($) $ in Thousands | Jul. 02, 2023 | Jan. 01, 2023 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 130 | $ 514 |
Derivative liability, fair value | 108 | 170 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 3,855 | 10,461 |
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 100 | 500 |
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 100 | 200 |
Prepaid expense and other current assets | Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 130 | 514 |
Prepaid expense and other current assets | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 3,855 | 7,218 |
Accrued liabilities | Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 108 | 170 |
Other assets | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 0 | $ 3,243 |
Derivative Instruments - Sche_2
Derivative Instruments - Schedule of Derivative Instruments in Condensed Consolidated Statements of Operations, Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives designated as hedging instruments | $ 446 | $ (1,861) | $ 2,632 | $ (4,371) |
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | 720 | (80) | (322) | 417 |
Interest rate derivatives | Interest expense, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives designated as hedging instruments | 446 | (1,861) | 2,632 | (4,371) |
Foreign currency derivatives | Other non-operating expense, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | 986 | 108 | 62 | (255) |
Commodity derivatives | Other non-operating expense, net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | $ (266) | $ (188) | $ (384) | $ 672 |
Vendor Finance Programs (Detail
Vendor Finance Programs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2023 | Jan. 01, 2023 | |
Supplier Finance Program [Line Items] | ||
Vendor finance program | $ 183,193 | $ 263,001 |
Accounts Payable | ||
Supplier Finance Program [Line Items] | ||
Vendor finance program | 132,746 | 159,426 |
Structured Payables | ||
Supplier Finance Program [Line Items] | ||
Vendor finance program | $ 50,447 | $ 103,575 |
Supply Chain Financing Programs | KKI | ||
Supplier Finance Program [Line Items] | ||
Period of trade payables payment | 180 days | |
Supply Chain Financing Programs | Vendors Under SCF Program | ||
Supplier Finance Program [Line Items] | ||
Period of trade payables payment | 360 days |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jul. 02, 2023 | Jan. 01, 2023 |
Debt Instrument [Line Items] | ||
Less: Debt issuance costs | $ (4,896) | $ (2,247) |
Finance lease obligations | 35,094 | 32,583 |
Total long-term debt | 855,198 | 779,086 |
Less: Current portion of long-term debt | (40,722) | (40,034) |
Long-term debt, less current portion | 814,476 | 739,052 |
Term Loan | 2023 Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 700,000 | 0 |
Term Loan | 2019 Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 586,250 |
Credit Facility | 2023 Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 125,000 | 0 |
Credit Facility | 2019 Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | $ 162,500 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jul. 02, 2023 | Mar. 31, 2023 | Jan. 01, 2023 | |
2023 Facility | |||
Debt Instrument [Line Items] | |||
Debt issuance costs, gross | $ 7.5 | ||
2023 Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 7.20% | 4.44% | |
2023 Facility | Credit Spread Adjustment | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.10% | ||
2023 Facility | Leverage Ratio equal to or exceeds 4.00 to 1.00 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 2.25% | ||
2023 Facility | Leverage Ratio less than 4.00 to 1.00 but greater than or equal to 3.00 to 1.00 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 2% | ||
2023 Facility | Leverage Ratio less than 3.00 to 1.00 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.75% | ||
2023 Facility | Term Loan | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 700 | ||
Debt issuance costs, gross | $ 5.3 | ||
2019 Facility | |||
Debt Instrument [Line Items] | |||
Deferred debt issuance cost, writeoff | 0.5 | ||
Revolving Credit Facility | 2023 Facility | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 300 | ||
Debt issuance costs, gross | $ 2.2 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option plan expense | $ 0.9 | $ 0.8 | $ 1.8 | $ 1.6 |
KKI | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vested (in shares) | 0 | 0 | ||
Stock option exercised (in shares) | 0 | 0 | ||
Restricted Stock Units (RSUs), Sixty Month Vesting Period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 60 months | |||
Award vesting period | 60 months | |||
Restricted Stock Units (RSUs), Sixty Month Vesting Period | Share-based payment arrangement, tranche one | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 60% | |||
Award vesting rights, percentage | 60% | |||
Restricted Stock Units (RSUs), Sixty Month Vesting Period | Share-based payment arrangement, tranche two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 20% | |||
Award vesting rights, percentage | 20% | |||
Restricted Stock Units (RSUs), Sixty Month Vesting Period | Share-based payment arrangement, tranche three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting rights, percentage | 20% | |||
Award vesting rights, percentage | 20% | |||
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock unit expense | $ 3.9 | $ 4.7 | $ 8.6 | $ 8.9 |
Granted (in shares) | 2,100,000 | |||
Granted (in shares) | 2,100,000 | |||
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | KKI | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 2,446,000 | |||
Granted (in shares) | 2,446,000 | |||
Performance Stock Units (PSUs), Twelve Month Vesting Period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Requisite Service Period | 1 year | |||
Performance Stock Units (PSUs), Thirty-six Month Vesting Period | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Requisite Service Period | 3 years | |||
Performance Stock Units (PSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 700,000 | |||
Granted (in shares) | 700,000 | |||
Performance Stock Units (PSUs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Score, Target Amounts | 0% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Score, Target Amounts | 0% | |||
Performance Stock Units (PSUs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Score, Target Amounts | 200% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Performance Score, Target Amounts | 200% |
Share-based Compensation - Sche
Share-based Compensation - Schedule of RSU Activity (Details) - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended |
Jul. 02, 2023 | Jul. 02, 2023 | |
Restricted Stock Units (RSUs) | KKUK | ||
RSUs and PSUs | ||
Beginning balance, non-vested shares outstanding (in shares) | 60 | |
Granted (in shares) | 0 | |
Vested (in shares) | 50 | |
Forfeited (in shares) | 3 | |
Ending balance, non-vested shares outstanding (in shares) | 7 | 7 |
Weighted Average Grant Date Fair Value | ||
Beginning balance, non-vested shares outstanding (in USD per share) | $ 15.77 | |
Granted, weighted average grant date fair value (in USD per share) | 0 | |
Vested, weighted average grant date fair value (in USD per share) | 13.41 | |
Forfeited, weighted average grant date fair value (in USD per share) | 21.21 | |
Ending balance, non-vested shares outstanding (in USD per share) | $ 29.80 | $ 29.80 |
Restricted Stock Units (RSUs) | Insomnia Cookies | ||
RSUs and PSUs | ||
Beginning balance, non-vested shares outstanding (in shares) | 38 | |
Granted (in shares) | 0 | |
Vested (in shares) | 0 | |
Forfeited (in shares) | 1 | |
Ending balance, non-vested shares outstanding (in shares) | 37 | 37 |
Weighted Average Grant Date Fair Value | ||
Beginning balance, non-vested shares outstanding (in USD per share) | $ 101.54 | |
Granted, weighted average grant date fair value (in USD per share) | 0 | |
Vested, weighted average grant date fair value (in USD per share) | 0 | |
Forfeited, weighted average grant date fair value (in USD per share) | 128.94 | |
Ending balance, non-vested shares outstanding (in USD per share) | $ 100.73 | $ 100.73 |
Restricted Stock Units (RSUs) | KK Australia | ||
RSUs and PSUs | ||
Beginning balance, non-vested shares outstanding (in shares) | 354 | |
Granted (in shares) | 0 | |
Vested (in shares) | 169 | |
Forfeited (in shares) | 0 | |
Ending balance, non-vested shares outstanding (in shares) | 185 | 185 |
Weighted Average Grant Date Fair Value | ||
Beginning balance, non-vested shares outstanding (in USD per share) | $ 1.47 | |
Granted, weighted average grant date fair value (in USD per share) | 0 | |
Vested, weighted average grant date fair value (in USD per share) | 1.36 | |
Forfeited, weighted average grant date fair value (in USD per share) | 0 | |
Ending balance, non-vested shares outstanding (in USD per share) | $ 1.57 | $ 1.57 |
Restricted Stock Units (RSUs) | KK Mexico | ||
RSUs and PSUs | ||
Beginning balance, non-vested shares outstanding (in shares) | 60 | |
Granted (in shares) | 0 | |
Vested (in shares) | 0 | |
Forfeited (in shares) | 40 | |
Ending balance, non-vested shares outstanding (in shares) | 20 | 20 |
Weighted Average Grant Date Fair Value | ||
Beginning balance, non-vested shares outstanding (in USD per share) | $ 33.08 | |
Granted, weighted average grant date fair value (in USD per share) | 0 | |
Vested, weighted average grant date fair value (in USD per share) | 0 | |
Forfeited, weighted average grant date fair value (in USD per share) | 34.58 | |
Ending balance, non-vested shares outstanding (in USD per share) | $ 30.18 | $ 30.18 |
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | ||
RSUs and PSUs | ||
Granted (in shares) | 2,100 | |
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | KKI | ||
RSUs and PSUs | ||
Beginning balance, non-vested shares outstanding (in shares) | 4,946 | |
Granted (in shares) | 2,446 | |
Vested (in shares) | 90 | |
Forfeited (in shares) | 228 | |
Ending balance, non-vested shares outstanding (in shares) | 7,074 | 7,074 |
Weighted Average Grant Date Fair Value | ||
Beginning balance, non-vested shares outstanding (in USD per share) | $ 14.23 | |
Granted, weighted average grant date fair value (in USD per share) | 14.82 | |
Vested, weighted average grant date fair value (in USD per share) | 13.02 | |
Forfeited, weighted average grant date fair value (in USD per share) | 14.82 | |
Ending balance, non-vested shares outstanding (in USD per share) | $ 14.43 | $ 14.43 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of RSU Unrecognized Compensation Expense (Details) $ in Thousands | 6 Months Ended |
Jul. 02, 2023 USD ($) | |
Restricted Stock Units (RSUs) | KKUK | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 125 |
Recognized Over a Weighted-Average Period of | 3 years |
Restricted Stock Units (RSUs) | Insomnia Cookies | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 1,898 |
Recognized Over a Weighted-Average Period of | 2 years 2 months 12 days |
Restricted Stock Units (RSUs) | KK Australia | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 119 |
Recognized Over a Weighted-Average Period of | 2 years |
Restricted Stock Units (RSUs) | KK Mexico | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 344 |
Recognized Over a Weighted-Average Period of | 2 years 1 month 6 days |
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | KKI | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 69,507 |
Recognized Over a Weighted-Average Period of | 3 years 2 months 12 days |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Stock Option Activity (Details) - KKI - $ / shares | 6 Months Ended | |
Jul. 02, 2023 | Jul. 03, 2022 | |
Options | ||
Beginning balance, share options outstanding (in shares) | 2,569,000 | |
Granted (in shares) | 424,000 | |
Exercised (in shares) | 0 | 0 |
Forfeited or expired (in shares) | 0 | |
Ending balance, share options outstanding (in shares) | 2,993,000 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance, share options outstanding (in USD per share) | $ 6.10 | |
Granted (in USD per share) | 4.72 | |
Exercised (in USD per share) | 0 | |
Forfeited or expired (in USD per share) | 0 | |
Ending balance, share options outstanding (in USD per share) | 5.90 | |
Weighted Average Exercise Price | ||
Beginning balance, share options outstanding (in USD per share) | 14.61 | |
Granted (in USD per share) | 12.45 | |
Exercised (in USD per share) | 0 | |
Forfeited or expired (in USD per share) | 0 | |
Ending balance, share options outstanding (in USD per share) | $ 14.30 |
Share-based Compensation - Sc_4
Share-based Compensation - Schedule of Stock Option Unrecognized Compensation Expense (Details) - Share-based Payment Arrangement, Option - KKI $ in Thousands | 6 Months Ended |
Jul. 02, 2023 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 9,987 |
Recognized Over a Weighted-Average Period of | 2 years 9 months 18 days |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 101.10% | (188.70%) | 131.30% | 57% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jul. 02, 2023 | Jan. 01, 2023 |
Loss Contingencies [Line Items] | ||
Letters of credit outstanding | $ 11 | $ 11.1 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | Jul. 02, 2023 USD ($) equity_method_investment | Jan. 01, 2023 USD ($) |
Related Party Transaction [Line Items] | ||
Number of franchisees | equity_method_investment | 3,000,000 | |
Equity Method Investee | ||
Related Party Transaction [Line Items] | ||
Equity method investments | $ | $ 1.6 | $ 1.9 |
KremeWorks USA, LLC | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 20% | |
KremeWorks Canada, L.P. | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 25% | |
Krispy Kreme France | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 33% |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 408,882 | $ 375,245 | $ 827,832 | $ 747,777 |
Company Shops, DFD and Branded Sweet Treats | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 387,428 | 354,551 | 780,242 | 706,385 |
Mix and equipment revenue from franchisees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 12,920 | 13,226 | 30,780 | 25,444 |
Franchise royalties and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 8,534 | $ 7,468 | $ 16,810 | $ 15,948 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Balances with Customers (Details) - USD ($) $ in Thousands | Jul. 02, 2023 | Jan. 01, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Trade receivables, net of allowances of $419 and $282, respectively | $ 42,148 | $ 40,131 |
Trade receivables, allowance for credit loss | 419 | 282 |
Deferred revenue: | ||
Current | 18,371 | 19,417 |
Noncurrent | 4,919 | 3,946 |
Total deferred revenue | $ 23,290 | $ 23,363 |
Net Earnings_(Loss) per Share -
Net Earnings/(Loss) per Share - Schedule of Net Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income/(loss) attributable to Krispy Kreme, Inc. | $ 223 | $ (3,849) | $ (78) | $ 153 |
Adjustment to net income/(loss) attributable to common shareholders | 0 | 0 | 0 | (374) |
Net income/(loss) attributable to common shareholders - Basic | 223 | (3,849) | (78) | (221) |
Additional income attributed to noncontrolling interest due to subsidiary potential common shares | (4) | (83) | (7) | (122) |
Net income/(loss) attributable to common shareholders - Diluted | $ 219 | $ (3,932) | $ (85) | $ (343) |
Basic weighted average common shares outstanding (in shares) | 168,184,000 | 167,367,000 | 168,162,000 | 167,314,000 |
Dilutive effect of outstanding common stock options and RSUs (in shares) | 2,475,000 | 0 | 0 | 0 |
Diluted weighted average common shares outstanding (in shares) | 170,659,000 | 167,367,000 | 168,162,000 | 167,314,000 |
Net income/(loss) per share: | ||||
Basic earnings/(loss) per share (in dollars per shares) | $ 0 | $ (0.02) | $ 0 | $ 0 |
Diluted earnings/(loss) per share (in dollars per shares) | $ 0 | $ (0.02) | $ 0 | $ 0 |
Net Earnings_(Loss) per Share_2
Net Earnings/(Loss) per Share - Schedule of Antidilutive Unvested RSUs Excluded from Computation of Net Loss per Share (Details) - Restricted Stock Units (RSUs) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2023 | Jul. 03, 2022 | Jul. 02, 2023 | Jul. 03, 2022 | |
KKI | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 224,000 | 6,222,000 | 7,074,000 | 6,222,000 |
KKUK | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 7,000 | 0 | 7,000 | 0 |
Insomnia Cookies | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 37,000 | 0 | 37,000 | 5,000 |
KK Australia | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 0 | 0 | 185,000 | 0 |
KK Mexico | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of net loss per share | 0 | 0 | 0 | 1,000 |
Net Earnings_(Loss) per Share_3
Net Earnings/(Loss) per Share - Additional Information (Details) - shares shares in Millions | 6 Months Ended | |
Jul. 02, 2023 | Jul. 03, 2022 | |
Share-based Payment Arrangement, Option | KKI | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 3 | 2.8 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2022 USD ($) | Jul. 02, 2023 USD ($) | Apr. 02, 2023 USD ($) | Jul. 03, 2022 USD ($) | Apr. 03, 2022 USD ($) | Jul. 02, 2023 USD ($) segment | Jul. 03, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||||||
Number of reportable segments | segment | 3 | ||||||
Total net revenues | $ 408,882 | $ 375,245 | $ 827,832 | $ 747,777 | |||
Segment adjusted EBITDA | 48,814 | 47,361 | 103,742 | 96,268 | |||
Interest expense, net | 12,063 | 7,586 | 24,051 | 14,937 | |||
Income tax (benefit)/expense | (7,563) | 1,574 | (7,246) | 5,374 | |||
Depreciation and amortization expense | 29,196 | 27,814 | 57,135 | 55,655 | |||
Share-based compensation | 4,824 | 5,452 | 10,369 | 10,493 | |||
Employer payroll taxes related to share-based compensation | 189 | 35 | 214 | 90 | |||
Other non-operating expense, net | 1,061 | 756 | 2,060 | 435 | |||
Strategic initiatives | 4,477 | 120 | 17,946 | 120 | |||
Acquisition and integration expenses | 339 | 82 | 430 | 599 | |||
New market penetration expenses | 241 | 260 | 335 | 370 | |||
Shop closure expenses | 1,484 | 1,894 | 805 | 2,124 | |||
Restructuring and severance expenses | 1,667 | 476 | 2,247 | 476 | |||
Gain on sale-leaseback | $ (2,600) | 15 | 0 | (9,646) | (2,374) | ||
Other | 737 | 3,720 | 3,314 | 3,919 | |||
Net income/(loss) | 84 | $ 1,644 | (2,408) | $ 6,458 | 1,728 | 4,050 | |
Corporate | |||||||
Segment Reporting Information [Line Items] | |||||||
Segment adjusted EBITDA | (14,468) | (8,686) | (28,608) | (21,918) | |||
U.S. | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net revenues | 267,417 | 244,665 | 548,761 | 492,584 | |||
U.S. | Operating Segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Segment adjusted EBITDA | 28,085 | 24,155 | 66,620 | 56,562 | |||
International | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net revenues | 98,332 | 93,853 | 188,620 | 181,054 | |||
International | Operating Segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Segment adjusted EBITDA | 19,463 | 19,535 | 33,030 | 36,779 | |||
Market Development | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net revenues | 43,133 | 36,727 | 90,451 | 74,139 | |||
Market Development | Operating Segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Segment adjusted EBITDA | $ 15,734 | $ 12,357 | $ 32,700 | $ 24,845 |