DNUT · Krispy Kreme
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $4.60
Note written ·
Price against the kill line
14.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $4.60, on record since 11 November 2026. The shares are up 22.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $4.60, the 5 November 2026 results-day close, which would show the shares regaining their post-earnings high and leading the S&P 500; full-year 2026 free cash flow above the $15 million guide with net leverage below 5.5 times would also prove the call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Consumer Staples
Quarter to 27 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 329
- Revenue, change on a year (%)
- −12.4
- Operating margin (%)
- −2.7
- Free cash flow, four quarters ($M)
- 18.0
- Net cash, cash less debt ($M)
- −838
- Enterprise value to sales (×)
- 1.1
- Free-cash-flow yield (%)
- 2.6
All filed numbers
What Krispy Kreme reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 329 | −12.4 | −2.7 |
| first filed | 331 | −12.8 | −3.3 |
| first filed | 367 | −2.2 | −1.0 |
| first filed | 392 | −2.9 | −1.9 |
| first filed | 375 | −1.2 | −1.9 |
| first filed | 380 | −13.5 | −114.4 |
| Pre-tax income ($M) | −22.2 |
| Net income ($M) four quarters: −84.2 | −13.4 |
| Diluted shares, change on a year (%) against the quarter to 28 September 2025 | +1.4 |
| Operating cash flow ($M) | 63.7 |
| Capital spending ($M) | 45.7 |
| Free cash flow ($M) | 18.0 |
| Cash and short-term investments ($M) | 30.3 |
| Debt ($M) long-term debt and finance leases | 868 |
| Net cash, cash less debt ($M) | −838 |
| Deferred revenue ($M) +2.9% on a year | 24.7 |
| Backlog, orders not yet delivered ($M) | 24.7 |
| Receivables ($M) | 77.4 |
| Inventory ($M) | 31.2 |
| Shareholders' equity ($M) | 614 |
| Market value ($M) | 680 |
| Enterprise value, market value plus net debt ($M) | 1,518 |
| Enterprise value to sales (×) | 1.1 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.1 |
| Free-cash-flow yield (%) | 2.6 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 10.8% of shares outstanding sold short, 9.3 days of average trading to cover, −7.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $3.0M | $0 |
The thesis
Krispy Kreme's shares are more likely to lag the S&P 500 over the next three months. The 5 November 2026 earnings beat has not yet turned into cash: free cash flow was negative $10.0 million through nine months, and net leverage was 5.5 times. The fourth-quarter report settles whether the debt-cutting plan produces cash.
The shares have already given back much of the results-day gain. They closed at $3.52 on 4 November 2026 and $4.60 on 5 November 2026, then fell for four straight sessions to $3.82 on 11 November 2026, per adjusted daily closes. The market priced the beat in one session and has since marked it down.
The rating is Low because the open questions are cash and leverage, and no report on either is due before the fourth-quarter results. Citigroup kept a Neutral rating on 9 November 2026 and raised its target to $4.80 from $4.00, per Benzinga. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) guidance stayed at $140–150 million, so the higher 2026 revenue range came without a higher profit range.
Bullish and bearish views on Krispy Kreme, Inc.
The bull case on Krispy Kreme, Inc. (DNUT), in brief: sales and earnings beat estimates. The bear case: free cash flow is still negative.
Bull case
- Sales and earnings beat estimates. Third-quarter sales of $328.758 million beat a $311.406 million estimate, and adjusted earnings per share of $0.06 beat a $0.01 estimate, per Benzinga on 5 November 2026. Adjusted EBITDA of $35.3 million rose 12.7% excluding a $9.3 million cyber insurance recovery in the prior-year quarter, per the company's release.
- Guidance rose while spending fell. The 5 November 2026 release raised revenue guidance to $1.35–1.40 billion from $1.25–1.35 billion. It cut capital spending guidance to $40–45 million from $50–60 million and guides to full-year free cash flow above $15 million.
- Leverage is down since year-end. Net leverage was 5.5 times at the third quarter, against 6.7 times at the end of 2025, per the release. Net refranchising proceeds reached $111.4 million this year, and liquidity was $250.5 million.
- The franchise mix keeps growing. Franchisees generated about 42% of third-quarter systemwide sales, against about 25% in fiscal 2025, per the release. The company signed a 33-shop New York metro agreement on 13 October 2026, per Benzinga, and a 120-shop Pakistan agreement after the quarter.
- US hubs are selling more. US sales per hub reached $5.3 million over the trailing four quarters, up 10.4%, per the 5 November 2026 earnings call. US organic revenue grew 0.9% in the quarter.
- Two banks raised targets after the report. BofA raised its target to $6.30 from $5.50 with a Buy rating around 6 November 2026, per StockAnalysis. Citigroup raised its target to $4.80 on 9 November 2026, above the $3.82 close on 11 November 2026.
- A new institutional holder disclosed a stake. BNP Paribas reported an 8.70% stake, about 15.09 million shares as of 30 September 2026, in a Schedule 13G reported by Benzinga on 10 November 2026.
Bear case
- Free cash flow is still negative. It was negative $6.1 million at the half and negative $10.0 million through nine months, per the company's results. The full-year guide of more than $15 million requires a strongly positive fourth quarter, and management gave no quarterly figure on the 5 November 2026 call.
- Leverage rose from the second quarter. Net leverage was 5.4 times on 28 June 2026 and 5.5 times at the third quarter, at the year-end objective of below 5.5 times without clearing it. Net debt of $839.5 million exceeded the $723.50 million market value StockAnalysis listed on 6 November 2026.
- The revenue raise has no stated cause. The 5 November 2026 release names no specific driver, and Chief Financial Officer Raphael Duvivier named none when BofA's Sara Senatore asked on the call.
- Underlying growth is flat. Third-quarter organic revenue fell 0.1% and international organic revenue fell 5.4%, mainly on the UK, per the release. Systemwide sales rose 1.0% in constant currency, under the 2–4% full-year guide.
- Input costs are rising. Duvivier said on the 5 November 2026 call that inflation is higher in commodities and fuel and that edible oil costs rose significantly since the prior quarter. Management plans to offset it with cost initiatives and modest pricing.
- Sell-side support is lukewarm. StockAnalysis listed a Hold consensus from 7 analysts and a $4.32 average target on 6 November 2026. Citigroup's 9 November 2026 move kept its Neutral rating.
- Litigation remains open. A securities class action over the McDonald's rollout continues in North Carolina federal court after the 27 August 2026 partial denial of the motion to dismiss.
Price setup
The shares closed at $3.82 on 11 November 2026, down from $4.60 on 5 November 2026, $4.17 on 6 November 2026, $4.03 on 9 November 2026 and $3.85 on 10 November 2026. The 52-week intraday high is $5.03, set on 5 November 2026, and the last close is 24.1% below it. The 52-week closing low is $2.82, on 23 October 2026.
The last close remains above the 50-day moving average of $3.17 and the 200-day moving average of $3.36, both as of 11 November 2026. The shares are up 16.5% over three months, against a $3.28 reference close on 13 August 2026. The $4.60 results-day close is the level the call turns on: a return above it would show buyers paying again for the beat before any cash proof arrives.
Catalysts ahead
- ~31 December 2026 (est.): Possible further international refranchising deal, which management says it is pursuing in 2026. Current guidance excludes it, so disclosed proceeds would cut net debt beyond the company's published outlook.
- ~25 February 2027 (est.): Fourth-quarter and full-year 2026 report; the company has not announced a date. Settles whether full-year free cash flow exceeds the $15 million guide and whether year-end net leverage falls below 5.5 times.
What would change the view
A daily close above $4.60, the 5 November 2026 results-day close, which would show the shares regaining their post-earnings high and leading the S&P 500; full-year 2026 free cash flow above the $15 million guide with net leverage below 5.5 times would also prove the call wrong.
What it trades with
The third-quarter report drove the recent move more than the broad market did. Benzinga's 5 November 2026 market report put the S&P 500 down 3.3% and the Nasdaq down 4.5% on the session the shares closed at $4.60. One session is too small a sample to say the shares have stopped following the market.
The drivers are company-specific: debt reduction, free cash flow and refranchising proceeds. A large international refranchising deal, which current guidance excludes, would move the shares more than any shift in consumer spending data.
The evidence, claim by claim (8)
- Third-quarter net revenue was $328.8 million, down 12.4% mainly on refranchising; organic revenue fell 0.1%; adjusted earnings per share were $0.06; the net loss was $13.3 million. Krispy Kreme third-quarter 2026 results release (Form 8-K) · as of
- Net leverage was 5.5 times, against 6.7 times at year-end 2025; net debt was $839.5 million, cash $30.3 million and total liquidity $250.5 million. Krispy Kreme third-quarter 2026 results release (Form 8-K) · as of
- Free cash flow was negative $10.0 million for the first three quarters, an $82 million improvement year over year, with full-year guidance of more than $15 million. Krispy Kreme third-quarter 2026 results release (Form 8-K) · as of
- 2026 revenue guidance rose to $1.35–1.40 billion from $1.25–1.35 billion; adjusted EBITDA guidance stayed at $140–150 million; capital spending guidance fell to $40–45 million from $50–60 million. Krispy Kreme third-quarter 2026 results release (Form 8-K) · as of
- Franchisees generated about 42% of third-quarter systemwide sales, against about 25% in fiscal 2025; net refranchising proceeds this year were $111.4 million. Krispy Kreme third-quarter 2026 results release (Form 8-K) · as of
- Chief Financial Officer Raphael Duvivier said inflation is higher in commodities and fuel and that edible oil costs rose significantly since the prior quarter. Krispy Kreme third-quarter 2026 earnings call transcript · as of
- Citigroup kept its Neutral rating on Krispy Kreme and raised its price target to $4.80 from $4.00. Benzinga analyst ratings headline · as of
- BNP Paribas reported an 8.70% stake in Krispy Kreme, about 15.09 million shares, as of 30 September 2026. Schedule 13G filing, reported by Benzinga on 10 November 2026 · as of
Sources
- Krispy Kreme, Inc. - Form 8-K - FY2026 · sec.gov
- Krispy Kreme (DNUT) Q3 2026 Earnings Call Transcript · fool.com ·
- Krispy Kreme Q3 2026 Earnings Call Transcript · benzinga.com
- Krispy Kreme (DNUT) Stock Price, Chart & News · stockanalysis.com
- Krispy Kreme (DNUT) Stock Price Target 2026 & Analyst Forecast · benzinga.com
Related · shared themes
CPRI
Capri Holdings
Capri Holdings' Michael Kors turnaround gives the shares a modest edge over the S&P 500 after the 30 October 2026 beat-and-raise, despite a…
CROX
Crocs
Crocs, Inc. is more likely to lead the S&P 500 over three months: a third-quarter beat and a third guidance raise lifted full-year adjusted…
CRSR
Corsair Gaming
Corsair Gaming's recovery case holds after it beat third-quarter guidance and raised its 2026 outlook on 5 November 2026; the…
EL
Estee Lauder Companies
Estée Lauder's turnaround now shows in sales as well as margins, with first-quarter organic sales up 6% and the fiscal 2027 outlook raised…
See also · stocks to watch