Shares of Krispy Kreme Doughnuts Inc. rose Thursday, a day after the company announced better-than-expected second-quarter net income for the second quarter of fiscal 2013, ended July 29.
Highlights included a 4.3 percent jump in revenues - to $102.1 million from $98.0 million, and an 87 percent increase in operating income, to $9.2 million from $4.9 million.
The Winston-Salem, N.C.-based doughnut maker said it earned $4.9 million, or 7 cents per share, down from $8.8 million, or 12 cents per share, in the same quarter last year.
"We were very pleased with our quarterly performance, as we drove both solid same store sales growth and increased guest traffic. The top-line momentum translated into significant year-over-year increases in both operating income and adjusted earnings per share," said James Morgan, president and CEO, during the company's earnings call Thursday.
Analysts, on average, expected a profit of 6 cents per share on $104.6 million in revenue, according to a FactSet poll.
Domestic franchise revenue increased 3.4 percent to $2.4 million, boosted by higher royalties. Total sales at domestic franchises rose 7.3 percent, while revenue at domestic franchises open at least a year increased 6.7 percent.
Meanwhile, international franchise revenue increased 8 percent to $5.8 million, also on higher royalty revenue. Total sales by international franchise stores rose 7.1 percent, boosted by the openings of new stores.
"In general, we view the result as further confirmation that the overall business is building a stronger foundation while new revenue driving catalysts are cultivated (e.g., coffee sales and domestic franchise growth)," wrote B Riley analyst Conrad Lyon in a note to investors. Lyon rated the company a "Buy."
