Guide to Krispy Kreme IPO

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Rebecca Cattlin
By :  ,  Former Senior Financial Writer

When is the Krispy Kreme IPO?

Krispy Kreme is expected to go public tomorrow, five years after Krispy Kreme took its shares off the stock market. The company filed to IPO in June 2021, and stated it expects the IPO to raise $100 million for the company, which it will use to fuel expansion plans and pay off some of its outstanding debt. 

The offer price range per share has been set at between $21 and $24.

Krispy Kreme will trade on the Nasdaq stock exchange under the ticker symbol DNUT. J.P. Morgan, Morgan Stanley, BofA Securities and Citigroup are the lead book-running managers from Krispy Kreme’s proposed offering.

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Krispy Kreme has actually already been a public company, after it listed shares on the NASDAQ on April 5, 2000 at $21 using the ticker symbol KREM. But the company returned to private ownership under JAB Holdings in 2016 following significant losses and accusations of accounts manipulations.

How to trade Krispy Kreme shares

When Krispy Kreme lists, you’ll be able to trade its shares in the same way you would any other publicly-traded company on the stock market.

You can trade stocks with City Index in these easy steps:

  1. Open a City Index account, or log in if you’re already a customer
  2. Search for the company you want to trade in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade

How much is Krispy Kreme worth?

Krispy Kreme was last valued at $1.35 billion when it was acquired by JAB Holding in 2016. Following its IPO, it is expected to be valued at around $4 billion.

What does Krispy Kreme do?

Krispy Kreme is known all over the world for its doughnuts, which can be found at its own doughnut shops – nicknamed ‘Hotlight Stores’ – and via partnerships with leading retailers.

The company was founded in America in 1937, and rapidly grew into one of the largest and most famous doughnut brands globally.

How does Krispy Kreme make money?

Krispy Kreme makes money through the sale of doughnuts and other food and drinks.

According to the company’s recent financials, its sales grew to $1.1 billion in its last fiscal year, up 17% from $959 million the year before. In 2020, it sold 1.3 billion doughnuts across 30 countries in fiscal 2020. Of these sales, 64% were of the Original Glazed doughnut, Krispy Kreme’s most iconic product. More than a third of Krispy Kreme’s global sales were generated outside of the United States and Canada.

Krispy Kreme also makes money through its cookie brand Insomnia Cookies, which it acquired in 2018. Insomnia delivers cookies, cakes and other baked goods straight customers doors. Over 50% of Insomnia’s sales are via its e-commerce platform.

What is Krispy Kreme's business strategy?

Krispy Kreme’s strategy will be based on two growing areas of concern: the trend toward health and fitness, and the rise of e-commerce and the stay-at-home consumer.

The company has had to reposition itself in the consumer goods market due to the growing trends toward health and fitness. A lot of companies that sell sugary foods and drinks are now looking to increase the number of healthy options they offer or rebrand themselves as a treat. This is why Krispy Kreme is now marketing itself as an ‘affordable indulgence’ that can be ‘enjoyed across cultures, races, and income levels’.

In order to meet the demands of e-commerce – a trend driven by Covid-19 lockdown measures – Krispy Kreme has created an omni-channel model. This means it operates across various channels, including:

  1. Hot Light Stores and Fresh Shops
  2. Partnerships with retailers
  3. E-commerce and home delivery
  4. Long-life, mass merchandise sales

Krispy Kreme has used its cookie business to accelerate its e-commerce presence quickly, as the younger brand had such an online demand already. Meanwhile, Insomnia benefits from Krispy Kreme’s brand presence and popularity.

The company’s business strategy is supported by significant investment that it hopes will put it in the best position for long-term sustained growth. These investments were into its omni-channel model outlined above, brand positioning, product quality and innovation capabilities.

Krispy Kreme aims to ensure consistent and fresh quality by increasing the number of franchised locations in the US and acquiring the existing businesses in the United Kingdom, Australia, Mexico and Japan.

As part of this business strategy, Krispy Kreme spent $20 million on consulting and advisory fees, personnel transition costs, buying out its franchisees and other initiatives.

Is Krispy Kreme profitable?

No, Krispy Kreme is not yet profitable as the company has $1.2 billion in debt – the interest on which has prevented it from turning a profit. However, the company has posted strong revenue growth, earnings $321.8 million in revenue in 2020, which is up 23% from 2019.

Krispy Kreme’s losses nearly doubled from $34 million in 2019 to $60 million 2020, mostly caused by the companies’ efforts to transform its brands.  

Learn how to read company earnings.

Who owns Krispy Kreme?

Krispy Kreme is owned by JAB Holding. The European investment firm acquired Krispy Kreme for roughly $1.35 billion in 2016.

JAB Holding also owns other consumer brands such as the sandwich shop Panera and the coffee chain JDE Peets. Panera is also expected to go public, while JDE Peet was listed in 2020.

Board of directors of Krispy Kreme

  • Michael Tattersfield – President & Chief Executive Officer
  • Richard Cheshire – CEO Krispy Kreme UK
  • James Krikorian – VP and Treasurer
  • Joshua Charlesworth – Chief Financial Officer
  • Joey Pruitt – Chief Accounting Officer
  • Anita K. Booe – Head of Investor Relations
  • David Skena – Chief Marketing Officer
  • Cathy Tang – Chief Legal Officer and Corporate Secretary

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