Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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, $0.01 par value per share | |
Entity Trading Symbol | DNUT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 168,700,000 | |
Entity Central Index Key | 0001857154 | |
Current Fiscal Year End Date | --12-29 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Total net revenues | $ 442,698 | $ 418,950 |
Product and distribution costs | 107,015 | 117,833 |
Operating expenses | 205,195 | 191,408 |
Selling, general and administrative expense | 71,574 | 61,468 |
Marketing expenses | 12,115 | 9,853 |
Pre-opening costs | 1,105 | 764 |
Other expenses/(income), net | 200 | (5,263) |
Depreciation and amortization expense | 33,586 | 27,939 |
Operating income | 11,908 | 14,948 |
Interest expense, net | 13,736 | 11,988 |
Other non-operating expense, net | 573 | 999 |
(Loss)/income before income taxes | (2,401) | 1,961 |
Income tax expense | 4,262 | 317 |
Net (loss)/income | (6,663) | 1,644 |
Net income attributable to noncontrolling interest | 1,871 | 1,945 |
Net loss attributable to Krispy Kreme, Inc. | $ (8,534) | $ (301) |
Net loss per share: | ||
Common stock — Basic (in dollars per share) | $ (0.05) | $ 0 |
Common stock — Diluted (in dollars per share) | $ (0.05) | $ 0 |
Weighted average shares outstanding: | ||
Basic (in shares) | 168,685 | 168,141 |
Diluted (in shares) | 168,685 | 168,141 |
Product sales | ||
Total net revenues | $ 433,512 | $ 410,674 |
Royalties and other revenues | ||
Total net revenues | $ 9,186 | $ 8,276 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Apr. 02, 2023 | ||
Statement of Comprehensive Income [Abstract] | |||
Net (loss)/income | $ (6,663) | $ 1,644 | |
Other comprehensive (loss)/income, net of income taxes: | |||
Foreign currency translation adjustment | (6,069) | 11,092 | |
Unrealized loss on cash flow hedges, net of income taxes (1) | [1] | (2,684) | (2,967) |
Total other comprehensive (loss)/income | (8,753) | 8,125 | |
Comprehensive (loss)/income | (15,416) | 9,769 | |
Net income attributable to noncontrolling interest | 1,871 | 1,945 | |
Foreign currency translation adjustment attributable to noncontrolling interest | (299) | (108) | |
Total comprehensive income attributable to noncontrolling interest | 1,572 | 1,837 | |
Comprehensive (loss)/income attributable to Krispy Kreme, Inc. | $ (16,988) | $ 7,932 | |
[1] Net of income tax benefit of $0.9 million and $1.0 million for the quarters ended March 31, 2024, and April 2, 2023, respectively. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized income on cash flow hedges, tax expense (benefit) | $ 0.9 | $ 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 33,132 | $ 38,185 |
Restricted cash | 480 | 429 |
Accounts receivable, net | 57,287 | 59,362 |
Inventories | 39,257 | 34,716 |
Taxes receivable | 18,397 | 15,526 |
Prepaid expense and other current assets | 25,461 | 25,363 |
Total current assets | 174,014 | 173,581 |
Property and equipment, net | 543,100 | 538,220 |
Goodwill | 1,098,826 | 1,101,939 |
Other intangible assets, net | 938,847 | 946,349 |
Operating lease right of use asset, net | 456,810 | 456,964 |
Other assets | 22,721 | 23,539 |
Total assets | 3,234,318 | 3,240,592 |
Current liabilities: | ||
Current portion of long-term debt | 60,326 | 54,631 |
Current operating lease liabilities | 50,275 | 50,365 |
Accounts payable | 128,555 | 156,488 |
Accrued liabilities | 117,093 | 134,005 |
Structured payables | 133,809 | 130,104 |
Total current liabilities | 490,058 | 525,593 |
Long-term debt, less current portion | 881,778 | 836,615 |
Noncurrent operating lease liabilities | 454,265 | 454,583 |
Deferred income taxes, net | 123,203 | 123,925 |
Other long-term obligations and deferred credits | 37,127 | 36,093 |
Total liabilities | 1,986,431 | 1,976,809 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, $0.01 par value; 300,000 shares authorized as of both March 31, 2024 and December 31, 2023; 168,731 and 168,628 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 1,687 | 1,686 |
Additional paid-in capital | 1,449,773 | 1,443,591 |
Shareholder note receivable | (3,629) | (3,850) |
Accumulated other comprehensive (loss)/income, net of income tax | (1,208) | 7,246 |
Retained deficit | (293,430) | (278,990) |
Total shareholders’ equity attributable to Krispy Kreme, Inc. | 1,153,193 | 1,169,683 |
Noncontrolling interest | 94,694 | 94,100 |
Total shareholders’ equity | 1,247,887 | 1,263,783 |
Total liabilities and shareholders’ equity | $ 3,234,318 | $ 3,240,592 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Mar. 31, 2024 | Dec. 31, 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) | 168,731 | 168,628 |
Common stock, shares outstanding (in shares) | 168,731 | 168,628 |
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. 01, 2023 | 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 | (5,884) | (5,884) | ||||||||
Distribution to noncontrolling interest | (1,139) | 0 | (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) | 0 | (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 | |
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 Dec. 31, 2023 | 168,628 | 168,628 | ||||||||
Beginning balance at Dec. 31, 2023 | $ 1,263,783 | $ 1,686 | 1,443,591 | (3,850) | 1,985 | 5,629 | (368) | (278,990) | 94,100 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net (loss) income | (6,663) | (8,534) | 1,871 | |||||||
Other comprehensive income/(loss), before reclassifications | (5,702) | (5,770) | 367 | (299) | ||||||
Reclassification from AOCI | (3,051) | (3,051) | ||||||||
Capital contribution from shareholders, net of loans issued | 232 | 0 | 232 | |||||||
Share-based compensation | 6,986 | 6,986 | ||||||||
Dividends declared on common stock and equivalents | [1] | (5,905) | (5,905) | |||||||
Distribution to noncontrolling interest | (977) | (977) | ||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld (in shares) | 103 | |||||||||
Issuance of common stock upon settlement of RSUs, net of shares withheld | (804) | $ 1 | (805) | |||||||
Other | $ (12) | 1 | (11) | (1) | (1) | |||||
Ending balance (in shares) at Mar. 31, 2024 | 168,731 | 168,731 | ||||||||
Ending balance at Mar. 31, 2024 | $ 1,247,887 | $ 1,687 | $ 1,449,773 | $ (3,629) | $ (3,785) | $ 2,945 | $ (368) | $ (293,430) | $ 94,694 | |
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 first quarter of fiscal 2024 and expected to be paid in the second quarter of fiscal 2024. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Parenthetical) (Unaudited) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 | $ 0.035 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
CASH FLOWS (USED FOR)/FROM OPERATING ACTIVITIES: | ||
Net (loss)/income | $ (6,663) | $ 1,644 |
Adjustments to reconcile net (loss)/income to net cash (used for)/provided by operating activities: | ||
Depreciation and amortization expense | 33,586 | 27,939 |
Deferred and other income taxes | 214 | (219) |
Loss on extinguishment of debt | 0 | 472 |
Impairment and lease termination charges | 247 | 4,900 |
(Gain)/loss on disposal of property and equipment | (49) | 33 |
Gain on sale-leaseback | 0 | (9,661) |
Share-based compensation | 6,986 | 5,545 |
Change in accounts and notes receivable allowances | 113 | 334 |
Inventory write-off | 411 | 7,115 |
Settlement of interest rate swap derivatives | 0 | 7,657 |
Amortization related to settlement of interest rate swap derivatives | (2,955) | 0 |
Other | 788 | (204) |
Change in operating assets and liabilities, excluding foreign currency translation adjustments | (50,383) | (35,190) |
Net cash (used for)/provided by operating activities | (17,705) | 10,365 |
CASH FLOWS USED FOR INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (29,064) | (26,553) |
Proceeds from sale-leaseback | 0 | 10,025 |
Other investing activities | 19 | 82 |
Net cash used for investing activities | (29,045) | (16,446) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the issuance of debt | 179,500 | 891,698 |
Repayment of long-term debt and lease obligations | (132,343) | (852,144) |
Payment of financing costs | 0 | (5,000) |
Proceeds from structured payables | 101,287 | 44,757 |
Payments on structured payables | (97,416) | (70,480) |
Capital contribution by shareholders, net of loans issued | 232 | 0 |
Distribution to shareholders | (5,902) | (5,884) |
Payments for repurchase and retirement of common stock | (804) | 0 |
Distribution to noncontrolling interest | (977) | (1,139) |
Net cash provided by financing activities | 43,577 | 1,808 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,829) | (1,373) |
Net decrease in cash, cash equivalents and restricted cash | (5,002) | (5,646) |
Cash, cash equivalents and restricted cash at beginning of period | 38,614 | 35,730 |
Cash, cash equivalents and restricted cash at end of period | 33,612 | 30,084 |
Supplemental schedule of non-cash investing and financing activities: | ||
Increase/(decrease) in accrual for property and equipment | 3,913 | (104) |
Accrual for distribution to shareholders | (5,905) | (5,884) |
Reconciliation of cash, cash equivalents and restricted cash at end of period: | ||
Cash and cash equivalents | 33,132 | 29,675 |
Restricted cash | 480 | 409 |
Total cash, cash equivalents and restricted cash | $ 33,612 | $ 30,084 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
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 deliver fresh doughnut experiences and produce doughnuts for Doughnut Shops, Delivered Fresh Daily (“DFD”) outlets, and digital 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 Bakeries globally; 2) International, which includes all Krispy Kreme Company-owned operations in the U.K., Ireland, Australia, New Zealand, Mexico, Canada, and Japan; and 3) Market Development, which includes franchise operations across the globe. 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 2023 and 2024 will reflect the results of operations for the 52-week periods ended December 31, 2023 and December 29, 2024, respectively. The quarters ended March 31, 2024 and April 2, 2023 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 December 31, 2023, included in the Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of December 31, 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 March 31, 2024 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending December 29, 2024. 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. (“KK U.K.”), 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 (Loss)/Income. 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 December 31, 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 March 31, 2024. Reclassifications Segment information is prepared on the same basis that the Company’s management reviews financial information for operational decision-making purposes. Effective January 1, 2024, the Company realigned its segment reporting structure such that the Company-owned Canada and Japan businesses have moved from the Market Development reportable operating segment to the International reportable operating segment. All segment information has been restated to be consistent with current presentation. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of Inventories are as follows: March 31, 2024 December 31, 2023 Raw materials $ 23,594 $ 21,000 Work in progress 470 211 Finished goods and purchased merchandise 15,193 13,505 Total inventories $ 39,257 $ 34,716 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 3 Months Ended |
Mar. 31, 2024 | |
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 December 31, 2023 $ 677,956 $ 294,468 $ 129,515 $ 1,101,939 Foreign currency impact — (3,113) — (3,113) Balance as of March 31, 2024 $ 677,956 $ 291,355 $ 129,515 $ 1,098,826 Other Intangible Assets, net Other intangible assets consist of the following: March 31, 2024 December 31, 2023 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade names and trademarks $ 657,990 $ — $ 657,990 $ 657,980 $ — $ 657,980 Intangible assets with definite lives Franchise agreements 30,390 (11,107) 19,283 30,390 (10,744) 19,646 Customer relationships 15,000 (6,629) 8,371 15,000 (6,413) 8,587 Reacquired franchise rights (1) 396,822 (143,619) 253,203 397,279 (137,143) 260,136 Total intangible assets with definite lives 442,212 (161,355) 280,857 442,669 (154,300) 288,369 Total intangible assets $ 1,100,202 $ (161,355) $ 938,847 $ 1,100,649 $ (154,300) $ 946,349 (1) Reacquired franchise rights include the impact of foreign currency fluctuations associated with the respective countries. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 December 31, 2023 Assets Classification Operating lease Operating lease right of use asset, net $ 456,810 $ 456,964 Finance lease Property and equipment, net 42,140 41,411 Total leased assets $ 498,950 $ 498,375 Liabilities Current Operating lease Current operating lease liabilities $ 50,275 $ 50,365 Finance lease Current portion of long-term debt 8,326 8,631 Noncurrent Operating lease Noncurrent operating lease liabilities 454,265 454,583 Finance lease Long-term debt, less current portion 39,637 38,486 Total leased liabilities $ 552,503 $ 552,065 Lease costs were as follows: Quarter Ended March 31, 2024 April 2, 2023 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 935 $ 891 Operating lease cost Operating expenses 24,023 22,390 Short-term lease cost Operating expenses 1,085 1,281 Variable lease costs Operating expenses 7,433 9,345 Sublease income Royalties and other revenues (35) (35) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 2,921 $ 1,584 Interest on lease liabilities Interest expense, net 877 573 Supplemental disclosures of cash flow information related to leases were as follows: Quarter Ended March 31, 2024 April 2, 2023 Other information Cash paid for leases: Operating cash flows for operating leases (1) $ 31,124 $ 29,145 Operating cash flows for finance leases 864 549 Financing cash flows for finance leases 2,593 1,696 Right of use assets obtained in exchange for new lease liabilities: Operating leases $ 13,114 $ 26,850 Finance leases 3,158 1,421 (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 $7.4 million and $9.3 million for the quarters ended March 31, 2024 and April 2, 2023, respectively. There were no lease termination charges in the quarter ended March 31, 2024. The Company recognized a net gain of $0.9 million included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations in the quarter ended April 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. There were no sale-leaseback transactions completed in the quarter ended March 31, 2024. In the quarter ended April 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 $9.7 million, which is included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations for the quarter ended April 2, 2023. |
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 March 31, 2024 December 31, 2023 Assets Classification Operating lease Operating lease right of use asset, net $ 456,810 $ 456,964 Finance lease Property and equipment, net 42,140 41,411 Total leased assets $ 498,950 $ 498,375 Liabilities Current Operating lease Current operating lease liabilities $ 50,275 $ 50,365 Finance lease Current portion of long-term debt 8,326 8,631 Noncurrent Operating lease Noncurrent operating lease liabilities 454,265 454,583 Finance lease Long-term debt, less current portion 39,637 38,486 Total leased liabilities $ 552,503 $ 552,065 Lease costs were as follows: Quarter Ended March 31, 2024 April 2, 2023 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 935 $ 891 Operating lease cost Operating expenses 24,023 22,390 Short-term lease cost Operating expenses 1,085 1,281 Variable lease costs Operating expenses 7,433 9,345 Sublease income Royalties and other revenues (35) (35) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 2,921 $ 1,584 Interest on lease liabilities Interest expense, net 877 573 Supplemental disclosures of cash flow information related to leases were as follows: Quarter Ended March 31, 2024 April 2, 2023 Other information Cash paid for leases: Operating cash flows for operating leases (1) $ 31,124 $ 29,145 Operating cash flows for finance leases 864 549 Financing cash flows for finance leases 2,593 1,696 Right of use assets obtained in exchange for new lease liabilities: Operating leases $ 13,114 $ 26,850 Finance leases 3,158 1,421 (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 $7.4 million and $9.3 million for the quarters ended March 31, 2024 and April 2, 2023, respectively. There were no lease termination charges in the quarter ended March 31, 2024. The Company recognized a net gain of $0.9 million included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations in the quarter ended April 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. There were no sale-leaseback transactions completed in the quarter ended March 31, 2024. In the quarter ended April 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 $9.7 million, which is included in Other expenses/(income), net on the Condensed Consolidated Statement of Operations for the quarter ended April 2, 2023. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023: March 31, 2024 Level 2 Assets: Interest rate derivatives $ 972 Commodity derivatives 341 Total Assets $ 1,313 Liabilities: Foreign currency derivatives $ 599 Total Liabilities $ 599 December 31, 2023 Level 2 Assets: Interest rate derivatives $ 1,596 Total Assets $ 1,596 Liabilities: Foreign currency derivatives $ 345 Commodity derivatives 113 Total Liabilities $ 458 There were no assets or liabilities measured using Level 1 and Level 3 inputs and no transfers of financial assets or liabilities among the levels within the fair value hierarchy during the quarter ended March 31, 2024 and fiscal year ended December 31, 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 | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023, the total notional amount of commodity derivatives was 1.4 million and 1.8 million gallons of fuel, respectively. They are scheduled to mature between April 2024 and December 2024 and January 2024 and December 2024, respectively. As of March 31, 2024 and December 31, 2023, the Company recorded an asset of $0.3 million and a liability of $0.1 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 March 31, 2024 and December 31, 2023, the Company has recorded assets of $1.0 million and $1.6 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 quarter ended April 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 credit facility discussed in Note 8 , Long-Term Debt. The net effect of the interest rate swap arrangements will be to fix the interest rate on the term loan under the 2023 Facility up to the notional amount outstanding at the rates payable under the swap agreements plus the Applicable Rate (as defined by the 2023 Facility), through the swap maturity dates in June 2024. 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 March 31, 2024 and December 31, 2023, the total notional amount of foreign exchange derivatives was $50.1 million and $49.8 million, respectively. They matured in April 2024 and January 2024, respectively. The Company recorded liabilities of $0.6 million and $0.3 million as of March 31, 2024 and December 31, 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 March 31, 2024 and December 31, 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 March 31, December 31, Balance Sheet Location Commodity derivatives $ 341 $ — Prepaid expense and other current assets Total Assets $ 341 $ — Foreign currency derivatives $ 599 $ 345 Accrued liabilities Commodity derivatives — 113 Accrued liabilities Total Liabilities $ 599 $ 458 Derivatives Fair Value Derivatives Designated as Hedging Instruments March 31, December 31, Balance Sheet Location Interest rate derivatives $ 972 $ 1,596 Prepaid expense and other current assets Total Assets $ 972 $ 1,596 The effect of derivative instruments on the Condensed Consolidated Statements of Operations for the quarters ended March 31, 2024 and April 2, 2023 is as follows: Derivative Gain Recognized in Income for the Quarter Ended Derivatives Designated as Hedging Instruments March 31, 2024 April 2, 2023 Location of Derivative Gain Recognized in Income Gain on interest rate derivatives $ 3,051 $ 2,186 Interest expense, net $ 3,051 $ 2,186 Derivative (Loss)/Gain Recognized in Income for the Quarter Ended Derivatives Not Designated as Hedging Instruments March 31, 2024 April 2, 2023 Location of Derivative (Loss)/Gain Recognized in Income Loss on foreign currency derivatives $ (254) $ (924) Other non-operating expense, net Gain/(loss) on commodity derivatives 454 (118) Other non-operating expense, net $ 200 $ (1,042) |
Vendor Finance Programs
Vendor Finance Programs | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Balance Sheet Location Supply chain financing programs $ 29,622 $ 51,239 Accounts payable Structured payables programs 133,809 130,104 Structured payables Total Liabilities $ 163,431 $ 181,343 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 |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company’s long-term debt obligations consists of the following: March 31, 2024 December 31, 2023 2023 Facility — term loan $ 673,750 $ 682,500 2023 Facility — revolving credit facility 207,500 155,000 Short-term lines of credit 17,000 11,000 Less: Debt issuance costs (4,109) (4,371) Finance lease obligations 47,963 47,117 Total long-term debt 942,104 891,246 Less: Current portion of long-term debt (60,326) (54,631) Long-term debt, less current portion $ 881,778 $ 836,615 2023 Secured Credit Facility The Company is party to a 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. 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. 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 March 31, 2024 and December 31, 2023, the unhedged interest rate was 7.43% and 7.46% under the 2023 Facility, respectively. As of March 31, 2024 and December 31, 2023, $505.0 million out of the $673.8 million term loan balance and $505.0 million out of the $682.5 million term loan balance, respectively, was hedged. The effective interest rate on the term loan was approximately 6.78% and 6.80% for the quarter ended March 31, 2024 and fiscal year ended December 31, 2023, respectively. The Company is required to make equal installments of 1.25% of the aggregate closing date principal amount of the term loan on the last day of each fiscal quarter. All remaining term loan and revolving loan balances are to be due at maturity in March 2028. Short-Term Lines of Credit The Company is party to two agreements with existing lenders providing for short-term, uncommitted lines of credit up to $25.0 million. Borrowings under these short-term lines of credit are payable to the lenders on a revolving basis for tenors up to a maximum of three months and are subject to an interest rate of adjusted term SOFR plus a credit spread adjustment of 0.10% plus a margin of 1.75%. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
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. 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 December 31, Granted Vested Forfeited Non-vested shares outstanding at March 31, KKI RSUs and PSUs 6,785 104 164 88 6,637 Weighted Average Grant Date Fair Value $ 14.54 13.52 14.75 15.11 $ 14.51 KK U.K. RSUs 7 — — — 7 Weighted Average Grant Date Fair Value $ 29.80 — — — $ 29.80 Insomnia Cookies RSUs 47 — 2 — 45 Weighted Average Grant Date Fair Value $ 120.21 — 74.12 — $ 122.42 KK Australia RSUs 185 — — — 185 Weighted Average Grant Date Fair Value $ 1.57 — — — $ 1.57 KK Mexico RSUs 20 — — — 20 Weighted Average Grant Date Fair Value $ 30.18 — — — $ 30.18 The Company recorded total non-cash compensation expense related to RSUs and PSUs under the plans of $6.1 million and $4.7 million for the quarters ended March 31, 2024, and April 2, 2023, 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 March 31, 2024 Unrecognized Compensation Cost Recognized Over a KKI $ 53,665 2.9 years KK U.K. 94 2.2 years Insomnia Cookies 3,355 0.9 years KK Australia 74 1.3 years KK Mexico 231 1.4 years The estimated fair value of restricted stock is calculated using a market approach (i.e., market multiple is used for the KK U.K. 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 (in thousands, except per share amounts) March 31, KKI Options 2,993 Weighted Average Grant Date Fair Value $ 5.90 Weighted Average Exercise Price $ 14.30 The Company recorded total non-cash compensation expense related to the time-vested stock options of $0.9 million and $0.9 million for the quarters ended March 31, 2024 and April 2, 2023, 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 March 31, 2024 Unrecognized Compensation Cost Recognized Over a KKI $ 7,311 2.1 years |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
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. In May 2023, the Company moved for a stay pending resolution of a similar case before the Illinois Supreme Court. The Company believes that it has meritorious defenses to the complaint and will vigorously defend against these claims. The Company has accrued an immaterial amount and management does not believe that this matter will have a material adverse effect on the Company’s financial results. 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 | 3 Months Ended |
Mar. 31, 2024 | |
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 $2.3 million and $2.8 million as of March 31, 2024 and December 31, 2023, respectively. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenues Revenues are disaggregated as follows: Quarter Ended March 31, 2024 April 2, 2023 Company Shops, DFD and Branded Sweet Treats $ 420,213 $ 392,814 Mix and equipment revenue from franchisees 13,299 17,860 Franchise royalties and other 9,186 8,276 Total net revenues $ 442,698 $ 418,950 Other revenues include advertising fund contributions from franchisees, rental income, development and franchise fees, and licensing royalties from customers for use of the Krispy Kreme brand, such as Keurig coffee cups. Contract Balances Deferred revenue and related receivables are as follows: March 31, 2024 December 31, 2023 Balance Sheet Location Trade receivables, net of allowances of $450 and $564, respectively $ 50,212 $ 45,858 Accounts receivables, net Deferred revenue: Current $ 21,772 $ 22,066 Accrued liabilities Noncurrent 7,714 6,005 Other long-term obligations and deferred credits Total deferred revenue $ 29,486 $ 28,071 Trade receivables relate primarily to payments due for royalties, franchise fees, advertising fees, sale of products, and licensing fees. Deferred revenue primarily represents the Company’s remaining performance obligations under gift cards and franchise and development agreements for which consideration has been received or is receivable and is generally recognized on a straight-line basis over the remaining term of the related agreement. The noncurrent portion of deferred revenue primarily relates to the remaining performance obligations in the franchise and development agreements. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table presents the calculations of basic and diluted EPS: Quarter Ended (in thousands, except per share amounts) March 31, 2024 April 2, 2023 Net loss attributable to Krispy Kreme, Inc. $ (8,534) $ (301) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (19) (10) Net loss attributable to common shareholders - Diluted $ (8,553) $ (311) Basic weighted average common shares outstanding 168,685 168,141 Dilutive effect of outstanding common stock options, RSUs, and PSUs — — Diluted weighted average common shares outstanding 168,685 168,141 Loss per share attributable to common shareholders: Basic $ (0.05) $ 0.00 Diluted $ (0.05) $ 0.00 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 (in thousands) March 31, 2024 April 2, 2023 KKI 6,637 5,097 KK U.K. 7 7 Insomnia Cookies — — KK Australia 185 276 KK Mexico — — For both quarters ended March 31, 2024 and April 2, 2023, all 3.0 million time-vested stock options were excluded from the computation of diluted weighted average common shares outstanding based on application of the treasury stock method. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
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 1, 2024, the Company realigned its segment reporting structure such that the Company-owned Canada and Japan businesses have moved from the Market Development reportable operating segment to the International reportable operating segment. All segment information has been restated to be consistent with current presentation. The reportable segment results are as follows: Quarter Ended March 31, 2024 April 2, 2023 Net revenues: U.S. $ 295,935 $ 281,344 International 124,750 111,988 Market Development 22,013 25,618 Total net revenues $ 442,698 $ 418,950 Quarter Ended March 31, 2024 April 2, 2023 Segment Adjusted EBITDA: U.S. $ 42,616 $ 38,535 International 20,536 18,982 Market Development 11,900 11,551 Corporate (16,864) (14,140) Adjusted EBITDA 58,188 54,928 Interest expense, net 13,736 11,988 Income tax expense 4,262 317 Depreciation and amortization expense 33,586 27,939 Share-based compensation 6,986 5,545 Employer payroll taxes related to share-based compensation 43 25 Other non-operating expense, net (1) 573 999 Strategic initiatives (2) 4,821 13,469 Acquisition and integration expenses (3) 248 91 New market penetration expenses (4) 466 94 Shop closure expenses/(income), net (5) 139 (679) Restructuring and severance expenses (6) 6 580 Gain on sale-leaseback — (9,661) Other (7) (15) 2,577 Net (loss)/income $ (6,663) $ 1,644 (1) Primarily foreign translation gains and losses in each period. (2) The quarter ended March 31, 2024 consists primarily of costs associated with global transformation, exploring strategic alternatives for the Insomnia Cookies business, and preparing for the McDonald’s U.S. expansion (with these specific initiatives aggregating to approximately $4.6 million of the total). The quarter ended April 2, 2023 consists 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 (approximately $13.4 million of the total). (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. The quarter ended April 2, 2023 includes gains 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. (6) The quarter ended April 2, 2023 consists primarily of costs associated with restructuring of the global executive team. (7) The quarters ended March 31, 2024 and April 2, 2023 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 previous business acquisitions. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company evaluated subsequent events and transactions for potential recognition or disclosure in the Condensed Consolidated Financial Statements through May 9, 2024, the date the Condensed Consolidated Financial Statements were available to be issued. All subsequent events requiring recognition and disclosure have been incorporated into these Condensed Consolidated Financial Statements. On April 30, 2024, the Company’s Board of Directors declared a $0.035 per share cash dividend payable on August 7, 2024, to shareholders of record on July 24, 2024. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Pay vs Performance Disclosure | ||
Net loss attributable to Krispy Kreme, Inc. | $ (8,534) | $ (301) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
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 2023 and 2024 will reflect the results of operations for the 52-week periods ended December 31, 2023 and December 29, 2024, respectively. The quarters ended March 31, 2024 and April 2, 2023 were both 13-week periods. |
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 December 31, 2023, included in the Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet as of December 31, 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 March 31, 2024 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending December 29, 2024. |
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 1, 2024, the Company realigned its segment reporting structure such that the Company-owned Canada and Japan businesses have moved from the Market Development reportable operating segment to the International reportable operating segment. All segment information has been restated to be consistent with current presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this standard retrospectively to all prior periods presented in the financial statements. We expect this standard to impact our segment disclosures, but with no impacts to our results of operations, cash flows, and financial condition. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which focuses on the rate reconciliation and income taxes paid disclosures. The standard requires a public business entity (“PBE”) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further disaggregated by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state, and foreign and by individual jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For PBEs, the standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity should apply the amendments in this standard prospectively, with retrospective application permitted. We expect this standard to impact our income tax disclosures, but with no impacts to our results of operations, cash flows, and financial condition. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of Inventories are as follows: March 31, 2024 December 31, 2023 Raw materials $ 23,594 $ 21,000 Work in progress 470 211 Finished goods and purchased merchandise 15,193 13,505 Total inventories $ 39,257 $ 34,716 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 December 31, 2023 $ 677,956 $ 294,468 $ 129,515 $ 1,101,939 Foreign currency impact — (3,113) — (3,113) Balance as of March 31, 2024 $ 677,956 $ 291,355 $ 129,515 $ 1,098,826 |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consist of the following: March 31, 2024 December 31, 2023 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade names and trademarks $ 657,990 $ — $ 657,990 $ 657,980 $ — $ 657,980 Intangible assets with definite lives Franchise agreements 30,390 (11,107) 19,283 30,390 (10,744) 19,646 Customer relationships 15,000 (6,629) 8,371 15,000 (6,413) 8,587 Reacquired franchise rights (1) 396,822 (143,619) 253,203 397,279 (137,143) 260,136 Total intangible assets with definite lives 442,212 (161,355) 280,857 442,669 (154,300) 288,369 Total intangible assets $ 1,100,202 $ (161,355) $ 938,847 $ 1,100,649 $ (154,300) $ 946,349 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following: March 31, 2024 December 31, 2023 Gross Accumulated Net Amount Gross Accumulated Net Amount Intangible assets with indefinite lives Trade names and trademarks $ 657,990 $ — $ 657,990 $ 657,980 $ — $ 657,980 Intangible assets with definite lives Franchise agreements 30,390 (11,107) 19,283 30,390 (10,744) 19,646 Customer relationships 15,000 (6,629) 8,371 15,000 (6,413) 8,587 Reacquired franchise rights (1) 396,822 (143,619) 253,203 397,279 (137,143) 260,136 Total intangible assets with definite lives 442,212 (161,355) 280,857 442,669 (154,300) 288,369 Total intangible assets $ 1,100,202 $ (161,355) $ 938,847 $ 1,100,649 $ (154,300) $ 946,349 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 December 31, 2023 Assets Classification Operating lease Operating lease right of use asset, net $ 456,810 $ 456,964 Finance lease Property and equipment, net 42,140 41,411 Total leased assets $ 498,950 $ 498,375 Liabilities Current Operating lease Current operating lease liabilities $ 50,275 $ 50,365 Finance lease Current portion of long-term debt 8,326 8,631 Noncurrent Operating lease Noncurrent operating lease liabilities 454,265 454,583 Finance lease Long-term debt, less current portion 39,637 38,486 Total leased liabilities $ 552,503 $ 552,065 |
Schedule of Lease Costs and Supplemental Cash Flow Information Related to Leases | Lease costs were as follows: Quarter Ended March 31, 2024 April 2, 2023 Lease cost Classification Operating lease cost Selling, general and administrative expense $ 935 $ 891 Operating lease cost Operating expenses 24,023 22,390 Short-term lease cost Operating expenses 1,085 1,281 Variable lease costs Operating expenses 7,433 9,345 Sublease income Royalties and other revenues (35) (35) Finance lease cost: Amortization of right of use assets Depreciation and amortization expense $ 2,921 $ 1,584 Interest on lease liabilities Interest expense, net 877 573 Supplemental disclosures of cash flow information related to leases were as follows: Quarter Ended March 31, 2024 April 2, 2023 Other information Cash paid for leases: Operating cash flows for operating leases (1) $ 31,124 $ 29,145 Operating cash flows for finance leases 864 549 Financing cash flows for finance leases 2,593 1,696 Right of use assets obtained in exchange for new lease liabilities: Operating leases $ 13,114 $ 26,850 Finance leases 3,158 1,421 (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 $7.4 million and $9.3 million for the quarters ended March 31, 2024 and April 2, 2023, respectively. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023: March 31, 2024 Level 2 Assets: Interest rate derivatives $ 972 Commodity derivatives 341 Total Assets $ 1,313 Liabilities: Foreign currency derivatives $ 599 Total Liabilities $ 599 December 31, 2023 Level 2 Assets: Interest rate derivatives $ 1,596 Total Assets $ 1,596 Liabilities: Foreign currency derivatives $ 345 Commodity derivatives 113 Total Liabilities $ 458 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 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 March 31, December 31, Balance Sheet Location Commodity derivatives $ 341 $ — Prepaid expense and other current assets Total Assets $ 341 $ — Foreign currency derivatives $ 599 $ 345 Accrued liabilities Commodity derivatives — 113 Accrued liabilities Total Liabilities $ 599 $ 458 Derivatives Fair Value Derivatives Designated as Hedging Instruments March 31, December 31, Balance Sheet Location Interest rate derivatives $ 972 $ 1,596 Prepaid expense and other current assets Total Assets $ 972 $ 1,596 |
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 March 31, 2024 and April 2, 2023 is as follows: Derivative Gain Recognized in Income for the Quarter Ended Derivatives Designated as Hedging Instruments March 31, 2024 April 2, 2023 Location of Derivative Gain Recognized in Income Gain on interest rate derivatives $ 3,051 $ 2,186 Interest expense, net $ 3,051 $ 2,186 Derivative (Loss)/Gain Recognized in Income for the Quarter Ended Derivatives Not Designated as Hedging Instruments March 31, 2024 April 2, 2023 Location of Derivative (Loss)/Gain Recognized in Income Loss on foreign currency derivatives $ (254) $ (924) Other non-operating expense, net Gain/(loss) on commodity derivatives 454 (118) Other non-operating expense, net $ 200 $ (1,042) |
Vendor Finance Programs (Tables
Vendor Finance Programs (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Balance Sheet Location Supply chain financing programs $ 29,622 $ 51,239 Accounts payable Structured payables programs 133,809 130,104 Structured payables Total Liabilities $ 163,431 $ 181,343 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The Company’s long-term debt obligations consists of the following: March 31, 2024 December 31, 2023 2023 Facility — term loan $ 673,750 $ 682,500 2023 Facility — revolving credit facility 207,500 155,000 Short-term lines of credit 17,000 11,000 Less: Debt issuance costs (4,109) (4,371) Finance lease obligations 47,963 47,117 Total long-term debt 942,104 891,246 Less: Current portion of long-term debt (60,326) (54,631) Long-term debt, less current portion $ 881,778 $ 836,615 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 December 31, Granted Vested Forfeited Non-vested shares outstanding at March 31, KKI RSUs and PSUs 6,785 104 164 88 6,637 Weighted Average Grant Date Fair Value $ 14.54 13.52 14.75 15.11 $ 14.51 KK U.K. RSUs 7 — — — 7 Weighted Average Grant Date Fair Value $ 29.80 — — — $ 29.80 Insomnia Cookies RSUs 47 — 2 — 45 Weighted Average Grant Date Fair Value $ 120.21 — 74.12 — $ 122.42 KK Australia RSUs 185 — — — 185 Weighted Average Grant Date Fair Value $ 1.57 — — — $ 1.57 KK Mexico RSUs 20 — — — 20 Weighted Average Grant Date Fair Value $ 30.18 — — — $ 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 March 31, 2024 Unrecognized Compensation Cost Recognized Over a KKI $ 53,665 2.9 years KK U.K. 94 2.2 years Insomnia Cookies 3,355 0.9 years KK Australia 74 1.3 years KK Mexico 231 1.4 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 March 31, 2024 Unrecognized Compensation Cost Recognized Over a KKI $ 7,311 2.1 years |
Share-based Payment Arrangement, Option, Activity | A summary of the status of the time-vested stock options as of March 31, 2024 (with no options granted, exercised, or forfeited since December 31, 2023) is presented below: Share options outstanding at (in thousands, except per share amounts) March 31, KKI Options 2,993 Weighted Average Grant Date Fair Value $ 5.90 Weighted Average Exercise Price $ 14.30 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues are disaggregated as follows: Quarter Ended March 31, 2024 April 2, 2023 Company Shops, DFD and Branded Sweet Treats $ 420,213 $ 392,814 Mix and equipment revenue from franchisees 13,299 17,860 Franchise royalties and other 9,186 8,276 Total net revenues $ 442,698 $ 418,950 |
Summary of Contract Balances with Customers | Deferred revenue and related receivables are as follows: March 31, 2024 December 31, 2023 Balance Sheet Location Trade receivables, net of allowances of $450 and $564, respectively $ 50,212 $ 45,858 Accounts receivables, net Deferred revenue: Current $ 21,772 $ 22,066 Accrued liabilities Noncurrent 7,714 6,005 Other long-term obligations and deferred credits Total deferred revenue $ 29,486 $ 28,071 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 (in thousands, except per share amounts) March 31, 2024 April 2, 2023 Net loss attributable to Krispy Kreme, Inc. $ (8,534) $ (301) Additional income attributed to noncontrolling interest due to subsidiary potential common shares (19) (10) Net loss attributable to common shareholders - Diluted $ (8,553) $ (311) Basic weighted average common shares outstanding 168,685 168,141 Dilutive effect of outstanding common stock options, RSUs, and PSUs — — Diluted weighted average common shares outstanding 168,685 168,141 Loss per share attributable to common shareholders: Basic $ (0.05) $ 0.00 Diluted $ (0.05) $ 0.00 |
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 (in thousands) March 31, 2024 April 2, 2023 KKI 6,637 5,097 KK U.K. 7 7 Insomnia Cookies — — KK Australia 185 276 KK Mexico — — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The reportable segment results are as follows: Quarter Ended March 31, 2024 April 2, 2023 Net revenues: U.S. $ 295,935 $ 281,344 International 124,750 111,988 Market Development 22,013 25,618 Total net revenues $ 442,698 $ 418,950 Quarter Ended March 31, 2024 April 2, 2023 Segment Adjusted EBITDA: U.S. $ 42,616 $ 38,535 International 20,536 18,982 Market Development 11,900 11,551 Corporate (16,864) (14,140) Adjusted EBITDA 58,188 54,928 Interest expense, net 13,736 11,988 Income tax expense 4,262 317 Depreciation and amortization expense 33,586 27,939 Share-based compensation 6,986 5,545 Employer payroll taxes related to share-based compensation 43 25 Other non-operating expense, net (1) 573 999 Strategic initiatives (2) 4,821 13,469 Acquisition and integration expenses (3) 248 91 New market penetration expenses (4) 466 94 Shop closure expenses/(income), net (5) 139 (679) Restructuring and severance expenses (6) 6 580 Gain on sale-leaseback — (9,661) Other (7) (15) 2,577 Net (loss)/income $ (6,663) $ 1,644 (1) Primarily foreign translation gains and losses in each period. (2) The quarter ended March 31, 2024 consists primarily of costs associated with global transformation, exploring strategic alternatives for the Insomnia Cookies business, and preparing for the McDonald’s U.S. expansion (with these specific initiatives aggregating to approximately $4.6 million of the total). The quarter ended April 2, 2023 consists 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 (approximately $13.4 million of the total). (3) Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period. (4) Consists of start-up costs associated with entry into new countries for which the Company’s brands have not previously operated, including the Insomnia Cookies brand entering Canada and the U.K. (5) Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment. The quarter ended April 2, 2023 includes gains related to the termination of leases at certain Krispy Kreme shops in the U.S. where the Company had already recognized impairment of the corresponding right of use assets in a prior period. (6) The quarter ended April 2, 2023 consists primarily of costs associated with restructuring of the global executive team. (7) The quarters ended March 31, 2024 and April 2, 2023 consist primarily of legal and other regulatory expenses incurred outside the ordinary course of business. The regulatory expenses incurred in the quarter ended April 2, 2023 relate to previous business acquisitions. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 23,594 | $ 21,000 |
Work in progress | 470 | 211 |
Finished goods and purchased merchandise | 15,193 | 13,505 |
Inventories | $ 39,257 | $ 34,716 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Inventory Disclosure [Abstract] | ||
Inventory write-off | $ 411 | $ 7,115 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,101,939 |
Foreign currency impact | (3,113) |
Ending balance | 1,098,826 |
U.S. | |
Goodwill [Roll Forward] | |
Beginning balance | 677,956 |
Foreign currency impact | 0 |
Ending balance | 677,956 |
International | |
Goodwill [Roll Forward] | |
Beginning balance | 294,468 |
Foreign currency impact | (3,113) |
Ending balance | 291,355 |
Market Development | |
Goodwill [Roll Forward] | |
Beginning balance | 129,515 |
Foreign currency impact | 0 |
Ending balance | $ 129,515 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Apr. 02, 2023 | Dec. 31, 2023 | |
Intangible assets with definite lives | |||
Gross Carrying Amount | $ 442,212 | $ 442,669 | |
Accumulated Amortization | (161,355) | (154,300) | |
Net Amount | 280,857 | 288,369 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 1,100,202 | 1,100,649 | |
Accumulated Amortization | (161,355) | (154,300) | |
Net Amount | 938,847 | 946,349 | |
Amortization of intangible assets | 7,400 | $ 7,300 | |
Trade names and trademarks | |||
Intangible assets with indefinite lives | |||
Trade names and trademarks | 657,990 | 657,980 | |
Franchise agreements | |||
Intangible assets with definite lives | |||
Gross Carrying Amount | 30,390 | 30,390 | |
Accumulated Amortization | (11,107) | (10,744) | |
Net Amount | 19,283 | 19,646 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | (11,107) | (10,744) | |
Customer relationships | |||
Intangible assets with definite lives | |||
Gross Carrying Amount | 15,000 | 15,000 | |
Accumulated Amortization | (6,629) | (6,413) | |
Net Amount | 8,371 | 8,587 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | (6,629) | (6,413) | |
Reacquired franchise rights (1) | |||
Intangible assets with definite lives | |||
Gross Carrying Amount | 396,822 | 397,279 | |
Accumulated Amortization | (143,619) | (137,143) | |
Net Amount | 253,203 | 260,136 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | $ (143,619) | $ (137,143) |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Operating lease | $ 456,810 | $ 456,964 |
Finance lease | $ 42,140 | $ 41,411 |
Finance lease assets, statement of financial position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Total leased assets | $ 498,950 | $ 498,375 |
Current | ||
Current operating lease liabilities | 50,275 | 50,365 |
Current finance lease liabilities | $ 8,326 | $ 8,631 |
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 | $ 454,265 | $ 454,583 |
Noncurrent finance lease liabilities | $ 39,637 | $ 38,486 |
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 | $ 552,503 | $ 552,065 |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Operating lease cost | ||
Short-term lease cost | $ 1,085 | $ 1,281 |
Variable lease costs | 7,433 | 9,345 |
Sublease income | (35) | (35) |
Amortization of right of use assets | 2,921 | 1,584 |
Interest on lease liabilities | 877 | 573 |
Selling, general and administrative expense | ||
Operating lease cost | ||
Operating lease cost | 935 | 891 |
Operating expenses | ||
Operating lease cost | ||
Operating lease cost | $ 24,023 | $ 22,390 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Cash paid for leases: | ||
Operating cash flows for operating leases | $ 31,124 | $ 29,145 |
Operating cash flows for finance leases | 864 | 549 |
Financing cash flows for finance leases | 2,593 | 1,696 |
Right of use assets obtained in exchange for new lease liabilities: | ||
Operating leases | 13,114 | 26,850 |
Finance leases | 3,158 | 1,421 |
Variable lease, payment | $ 7,400 | $ 9,300 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) property | Apr. 02, 2023 USD ($) property | |
Leases [Abstract] | ||
Leases, termination costs | $ 0 | $ 900 |
Number of real estate properties | property | 0 | 1 |
Proceeds from sale-leaseback | $ 0 | $ 10,025 |
Gain on sale-leaseback | $ 0 | $ 9,661 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair value, recurring - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Level 2 | ||
Assets: | ||
Total Assets | $ 1,313,000 | $ 1,596,000 |
Liabilities: | ||
Total Liabilities | 599,000 | 458,000 |
Level 2 | Interest rate derivatives | ||
Assets: | ||
Derivative assets | 972,000 | 1,596,000 |
Liabilities: | ||
Derivative liabilities | 113,000 | |
Level 2 | Commodity derivatives | ||
Assets: | ||
Derivative assets | 341,000 | |
Level 2 | Foreign currency derivatives | ||
Liabilities: | ||
Derivative liabilities | 599,000 | 345,000 |
Level 3 | ||
Assets: | ||
Total Assets | 0 | 0 |
Level 1 | ||
Assets: | ||
Total Assets | $ 0 | $ 0 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) $ in Thousands, gal in Millions | 3 Months Ended | ||||
Jul. 02, 2023 gal | Jan. 01, 2023 gal | Mar. 31, 2024 USD ($) | Apr. 02, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Settlement of interest rate swap derivatives | $ 0 | $ 7,657 | |||
2023 Facility | Term Loan | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, amount of hedged item | 505,000 | $ 505,000 | |||
Derivatives Not Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative asset, fair value | 341 | 0 | |||
Derivative liability, fair value | 599 | 458 | |||
Derivatives Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative asset, fair value | 972 | 1,596 | |||
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount (in gallon) | gal | 1.4 | 1.8 | |||
Derivative asset, fair value | 300 | 100 | |||
Interest rate derivatives | Derivatives Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 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 | 1,000 | 1,600 | |||
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 50,100 | 49,800 | |||
Derivative liability, fair value | $ 600 | $ 300 | |||
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% |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments in Condensed Consolidated Balance Sheets, Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 341 | $ 0 |
Derivative liability, fair value | 599 | 458 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 972 | 1,596 |
Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 300 | 100 |
Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 600 | 300 |
Prepaid expense and other current assets | Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 341 | 0 |
Prepaid expense and other current assets | Interest rate derivatives | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 972 | 1,596 |
Accrued liabilities | Commodity derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 113 |
Accrued liabilities | Foreign currency derivatives | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 599 | $ 345 |
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 | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative gain (loss) recognised in income, derivatives designated as hedging instruments | $ 3,051 | $ 2,186 |
Derivative gain (loss) recognised in income, derivatives not designated as hedging instruments | 200 | (1,042) |
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 | 3,051 | 2,186 |
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 | (254) | (924) |
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 | $ 454 | $ (118) |
Vendor Finance Programs (Detail
Vendor Finance Programs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Supplier Finance Program [Line Items] | ||
Vendor finance program | $ 163,431 | $ 181,343 |
Accounts Payable | ||
Supplier Finance Program [Line Items] | ||
Vendor finance program | 29,622 | 51,239 |
Structured Payables | ||
Supplier Finance Program [Line Items] | ||
Vendor finance program | $ 133,809 | $ 130,104 |
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 | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Less: Debt issuance costs | $ (4,109) | $ (4,371) |
Finance lease obligations | 47,963 | 47,117 |
Total long-term debt | 942,104 | 891,246 |
Less: Current portion of long-term debt | (60,326) | (54,631) |
Long-term debt, less current portion | 881,778 | 836,615 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Short-term lines of credit | 17,000 | 11,000 |
Term Loan | 2023 Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 673,750 | 682,500 |
Credit Facility | 2023 Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 207,500 | $ 155,000 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2023 USD ($) agreement | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | |
Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25 | |||
Debt instrument, basis spread on variable rate | 1.75% | |||
Number of agreements | agreement | 2 | |||
Secured Overnight Financing Rate (SOFR) | Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.10% | |||
2023 Facility | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 7.43% | 7.46% | ||
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) | ||||
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) | ||||
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) | ||||
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 | |||
Derivative, amount of hedged item | $ 505 | $ 505 | ||
Debt instrument, interest rate, effective percentage | 6.78% | 6.80% | ||
Revolving Credit Facility | 2023 Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 300 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option plan expense | $ 0.9 | $ 0.9 |
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 | |
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock unit expense | $ 6.1 | $ 4.7 |
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | KKI | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 104,000 | |
Granted (in shares) | 104,000 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of RSU Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted Stock Units (RSUs) | KK U.K. | |
RSUs and PSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 7 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 7 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 29.80 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 29.80 |
Restricted Stock Units (RSUs) | Insomnia Cookies | |
RSUs and PSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 47 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 2 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 45 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 120.21 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 74.12 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 122.42 |
Restricted Stock Units (RSUs) | KK Australia | |
RSUs and PSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 185 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 185 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 1.57 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 1.57 |
Restricted Stock Units (RSUs) | KK Mexico | |
RSUs and PSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 20 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance, non-vested shares outstanding (in shares) | shares | 20 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 30.18 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 0 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 30.18 |
Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) | KKI | |
RSUs and PSUs | |
Beginning balance, non-vested shares outstanding (in shares) | shares | 6,785 |
Granted (in shares) | shares | 104 |
Vested (in shares) | shares | 164 |
Forfeited (in shares) | shares | 88 |
Ending balance, non-vested shares outstanding (in shares) | shares | 6,637 |
Weighted Average Grant Date Fair Value | |
Beginning balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 14.54 |
Granted, weighted average grant date fair value (in USD per share) | $ / shares | 13.52 |
Vested, weighted average grant date fair value (in USD per share) | $ / shares | 14.75 |
Forfeited, weighted average grant date fair value (in USD per share) | $ / shares | 15.11 |
Ending balance, non-vested shares outstanding (in USD per share) | $ / shares | $ 14.51 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of RSU Unrecognized Compensation Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Restricted Stock Units (RSUs) | KK U.K. | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 94 |
Recognized Over a Weighted-Average Period of | 2 years 2 months 12 days |
Restricted Stock Units (RSUs) | Insomnia Cookies | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 3,355 |
Recognized Over a Weighted-Average Period of | 10 months 24 days |
Restricted Stock Units (RSUs) | KK Australia | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 74 |
Recognized Over a Weighted-Average Period of | 1 year 3 months 18 days |
Restricted Stock Units (RSUs) | KK Mexico | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 231 |
Recognized Over a Weighted-Average Period of | 1 year 4 months 24 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 | $ 53,665 |
Recognized Over a Weighted-Average Period of | 2 years 10 months 24 days |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Stock Option Activity (Details) - KKI | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Options | |
Granted (in shares) | 0 |
Exercised (in shares) | 0 |
Forfeited or expired (in shares) | 0 |
Ending balance, share options outstanding (in shares) | 2,993,000 |
Weighted Average Grant Date Fair Value | |
Ending balance, share options outstanding (in USD per share) | $ / shares | $ 5.90 |
Weighted Average Exercise Price | |
Ending balance, share options outstanding (in USD per share) | $ / shares | $ 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 | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 7,311 |
Recognized Over a Weighted-Average Period of | 2 years 1 month 6 days |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (177.50%) | 16.20% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Loss Contingencies [Line Items] | ||
Letters of credit outstanding | $ 13.3 | $ 15.4 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | Mar. 31, 2024 USD ($) equity_method_investment | Dec. 31, 2023 USD ($) |
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 | $ | $ 2.3 | $ 2.8 |
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 | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total net revenues | $ 442,698 | $ 418,950 |
Company Shops, DFD and Branded Sweet Treats | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 420,213 | 392,814 |
Mix and equipment revenue from franchisees | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 13,299 | 17,860 |
Franchise royalties and other | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | $ 9,186 | $ 8,276 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Contract Balances with Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Trade receivables, net of allowances of $450 and $564, respectively | $ 50,212 | $ 45,858 |
Trade receivables, allowance for credit loss | 450 | 564 |
Deferred revenue: | ||
Current | 21,772 | 22,066 |
Noncurrent | 7,714 | 6,005 |
Total deferred revenue | $ 29,486 | $ 28,071 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Net Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to Krispy Kreme, Inc. | $ (8,534) | $ (301) |
Additional income attributed to noncontrolling interest due to subsidiary potential common shares | (19) | (10) |
Net loss attributable to common shareholders - Diluted | $ (8,553) | $ (311) |
Basic weighted average common shares outstanding (in shares) | 168,685 | 168,141 |
Dilutive effect of outstanding common stock options and RSUs (in shares) | 0 | 0 |
Diluted weighted average common shares outstanding (in shares) | 168,685 | 168,141 |
Net loss per share: | ||
Basic earnings/(loss) per share (in dollars per shares) | $ (0.05) | $ 0 |
Diluted earnings/(loss) per share (in dollars per shares) | $ (0.05) | $ 0 |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of Antidilutive Unvested RSUs Excluded from Computation of Net Loss per Share (Details) - Restricted Stock Units (RSUs) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
KKI | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 6,637 | 5,097 |
KK U.K. | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 7 | 7 |
Insomnia Cookies | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 0 | 0 |
KK Australia | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of net loss per share | 185 | 276 |
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 |
Net Loss per Share - Additional
Net Loss per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Apr. 02, 2023 | |
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 | 3 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) segment | Apr. 02, 2023 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 3 | |
Total net revenues | $ 442,698 | $ 418,950 |
Segment adjusted EBITDA | 58,188 | 54,928 |
Interest expense, net | 13,736 | 11,988 |
Income tax expense | 4,262 | 317 |
Depreciation and amortization expense | 33,586 | 27,939 |
Share-based compensation | 6,986 | 5,545 |
Employer payroll taxes related to share-based compensation | 43 | 25 |
Other non-operating expense, net | 573 | 999 |
Strategic initiatives | 4,821 | 13,469 |
Acquisition and integration expenses | 248 | 91 |
New market penetration expenses | 466 | 94 |
Shop closure expenses | 139 | (679) |
Restructuring and severance expenses | 6 | 580 |
Gain on sale-leaseback | 0 | (9,661) |
Other | (15) | 2,577 |
Net (loss)/income | (6,663) | 1,644 |
Strategic Initiatives | ||
Segment Reporting Information [Line Items] | ||
Global transformation, strategic alternatives, and McDonald's expansion | 4,600 | |
Property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs | 13,400 | |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | (16,864) | (14,140) |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 295,935 | 281,344 |
U.S. | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | 42,616 | 38,535 |
International | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 124,750 | 111,988 |
International | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | 20,536 | 18,982 |
Market Development | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 22,013 | 25,618 |
Market Development | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment adjusted EBITDA | $ 11,900 | $ 11,551 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | 3 Months Ended | ||
Apr. 30, 2024 | Mar. 31, 2024 | Apr. 02, 2023 | |
Subsequent Event [Line Items] | |||
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 | $ 0.035 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared on common stock and equivalents (in dollars per share) | $ 0.035 |