Krispy Kreme is getting out of the logistics business and focusing more on franchising, and its efforts in those areas are showing progress.
The doughnut chain’s adjusted EBITDA margin—or earnings before interest, taxes, depreciation and amortization—improved by 280 basis points in the fourth quarter, despite lower revenue in the period. Systemwide sales, meanwhile, increased 0.7% for the full year and the company expects that metric to grow 2% to 4% this year.
The results were viewed as healthy signs of progress for a chain that spent much of 2025 on defense, notably with the end of its McDonald’s partnership and a 13.5% reduction in the number of places people can buy its doughnuts.
“The team got the business back to profitability,” CEO Josh Charlesworth said in an interview.
He noted that the company in the fourth quarter got back to the business of expansion, adding another 200 “DFD doors,” or kiosks at retailers where its doughnuts are sold.
“To have those 200 fresh delivery doors go in the fourth quarter, returning us back to that expansion phase, was a really nice reward for all our hard work,” Charlesworth said. “That should set us up well in 2026 to have profitable growth. Not just growth.”
Investors bought in. Krispy Kreme’s stock skyrocketed 28% on Thursday.
To be sure, the company’s shares remain in a deep hole. Even after Thursday’s performance, the shares have declined 77% since its 2021 initial public offering. Yet the company’s results on Thursday were viewed as refreshing for a company that weathered a lot of bad news last year.
Krispy Kreme is one of the country’s more unique restaurant chains, in that it has in recent years acted as much like a manufacturer and distributor of doughnuts than it does a restaurant chain.
The company uses its 400 or so U.S. doughnut shops as manufacturing facilities, from which it delivers doughnuts daily to those DFD doors, including retailers like Target, Walmart and Kroger.
In many respects, 2025 was about returning to the franchise model. Last year, 75% of the chain’s sales came from company-operated locations. By 2027, that should be down to 50%, a more “capital light” business model. That was accentuated with its recent sale of its Japan market. The company plans to sell off two to three international markets this year.
Maybe more importantly, the company is getting out of the logistics business. Krispy Kreme had invested in the logistics operation it used to deliver doughnuts, but that operation proved both difficult and costly. The company is shifting this year to an outsourced operation.
“That’s a lot easier than trying to build it all ourselves,” Charlesworth said. “We are moving rapidly to the third-party model.
“We really feel like the quality and the service standards are at, or better, than we had before. And you know, the reduced exposure to risk of managing the fleet is obvious.”
Yet the company still believes it has opportunities to bring doughnuts to more places, so long as those places are profitable. Executives told analysts that there are plenty of locations of Walmart, Target, Costco and Sam’s Club where it can sell doughnuts. Many of these retailers give the company good exposure to customers, with prominent displays.
“We have to quickly get to a common understanding that Krispy Kreme can be part of their overall food and beverage strategy, and specifically their bakery strategy,” Charlesworth said. He said that Krispy Kreme can attract traffic and incremental purchases and doesn’t cannibalize their existing products.
“As soon as the retailer understands that, we found that they quickly get behind the opportunity.”
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