Krispy Kreme (DNUT) Q4 2025 earnings summary

Executive summary

• Achieved significant progress on a turnaround plan focused on deleveraging, refranchising, capital efficiency, margin expansion, and sustainable growth, despite a modest net revenue decline from strategic closures and exits.

• Adjusted EBITDA rose 21% year-over-year to $55.6M in Q4 2025, with margin up 280 bps to 14.2%, driven by productivity gains, SG&A savings, and insurance recoveries.

• Ended 2025 with positive momentum from U.S. growth, higher digital sales, and international expansion, while incurring a GAAP net loss of $523.8M due to goodwill impairment and restructuring costs.

• Exited underperforming U.S. stores and McDonald's partnership, resulting in a modest net revenue decline but significant adjusted EBITDA and margin growth, reduced leverage, and positive free cash flow.

• Full year 2025 net revenue was $1.52B, down 8.6% year-over-year, reflecting the sale of Insomnia Cookies and strategic exits.

Financial highlights

• Q4 2025 net revenue was $392.4M, down 2.9% year-over-year; adjusted EBITDA was $55.6M, up 21% year-over-year and 37% sequentially.

• Q4 adjusted net income was $15.0M (diluted EPS $0.09), up from $1.2M (EPS $0.01) in Q4 2024.

• Free cash flow for Q4 was $27.9M, up $34.8M year-over-year; full year free cash flow was -$64.0M; year-end liquidity stood at $207M.

• Full year adjusted EBITDA fell 27.5% to $140.3M; adjusted net loss was $17.7M (diluted EPS -$0.10).

• Cash provided by operating activities was $45.0M in Q4 and $33.9M for the year.

Outlook and guidance

• 2026 guidance: system-wide sales growth of 2%-4% (constant currency), at least 100 new global shop openings, CapEx of $50–$60M, positive free cash flow, and net leverage ratio at or below 5.5x.

• Expect nearly 50% of system-wide sales from franchisees by early 2027, with 2–3 international refranchising deals targeted for 2026.

• Targeting 50% of system-wide sales from franchisees (up from 25% in 2025), opening 100+ new shops globally.