Is Krispy Kreme going public?
Krispy Kreme returns to the public markets Thursday, the morning after pricing 29.4 million initial public offering shares below the expected range at $17 per share. The IPO raised nearly $500 million, valuing the donut chain at $2.7 billion. cnbc.comFull interview with Krispy Kreme CEO on going public again, growth outlook and more
When did Krispy Kreme go public?
On April 5, 2000, the corporation went public on the NASDAQ at $21 using the ticker symbol KREM. On May 17, 2001, Krispy Kreme switched to the New York Stock Exchange, with the ticker symbol KKD, which it carried until its private acquisition. wikipedia.orgKrispy Kreme
Shares of the doughnut chain priced in at $17 on Wednesday, listing on the Nasdaq under the ticker "DNUT" and slightly below the expected range of $21 to $24. Yet the stock popped by over 23% to end the session at $21 per share, after briefly dipping to $16.30 in its market debut.
Analysts had initially seen Krispy Kreme's valuation topping $3 billion, but the stock listing undermined some of the loftier estimates. Still, CEO Michael Tattersfield appeared to glaze over any doubts about the company's prospects.
"We've been a public company once before and we are now again, we're able to do that," he told Yahoo Finance LIVE in an interview Thursday morning.
In 2016, Krispy Kreme was acquired by the consumer good investment firm JAB Holding Company for $1.35 billion. Now the 84-year-old company is returning to the public market with a valuation of $2.7 billion.
"We think the stock is worth no more than $1.6 billion, which is slightly higher than the $1.35 billion JAB Holdings paid to take Krispy Kreme private in 2016," said David Trainer, CEO of New Constructs, an investment research firm.
In a downbeat assessment, Trainer accused JAB of "looking to cash out at the expense of new investors," adding that he doubts the newly-public company will be able to keep up with its peers.
Turning doughnuts into big cash "looks unlikely given the shift in consumer preferences toward healthier foods and the failure of its past growth strategy to achieve the economies of scale needed to operate profitably," Trainer said.
Yet Tattersfield insisted the company has "transformed its business" since its previous run as a public company, largely by focusing on its brand and culture at large.
"We really drove an omni-channel to make doughnuts...following where the customers are," he told Yahoo Finance, underscoring the company's ability to boost revenue and earnings before interest, taxes and depreciation.
In fiscal 2020, Krispy Kreme brought in a net revenue of $1.1 billion, the highest level in its history. The company also sold 1.3 billion doughnuts across 30 countries in 2020.
Confident in its return to the public market, he says since Krispy Kreme was acquired, the business is two and a half times the value that was generated. He called the road ahead a "really tremendous journey" for both its U.S. and overseas operations.
In the company's S-1 filing, Kripsy Kreme emphasized the importance of its omni-channel "hub & spoke" model that aims to maximize "market opportunity while ensuring control and quality" across its products.
Within this model, there are destination spots that the company calls "Hot Light Theater Shops" which provide a customer experience as well as a local production facility.
"We have a little less than 400 Hot Light Shops across the globe...they're special, they produce the doughnuts," Tattersfield noted.
"Instead of focusing on doing more doughnut shops, we actually try to figure out how to build an omni-channel to get to where the customers are," he added. That allows for daily fresh deliveries to wholesale select grocers, and select convenience stores within that local area.
The company currently controls 85% of its U.S. doughnut shops, which he says has "allowed them to really expand the brand and get doughnuts to where customers are" and has 52 national and international franchise partners, according to its S-1 filing.
Krispy Kreme Inc. priced its initial public offering at $17 a share late Wednesday, raising about $500 million.
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Read full article at MarketWatch
02 July, 2021 - 03:21pm
Krispy Kreme shares closed Thursday up more than 23% despite a disappointing opening trade for the company's return to the public markets.
On Wednesday night, the doughnut chain priced its initial public offering at $17 per share, well below its planned range of $21 to $24 per share. The stock's first trade on Thursday afternoon was $16.30 per share, but shares quickly rebounded. When the markets closed, the stock was trading for $21 a share.
The share offering raised $500 million for the company and gave it an implied valuation of $2.7 billion. Krispy Kreme, which also owns Insomnia Cookies, is trading on the Nasdaq under the ticker "DNUT."
The chain first went public 21 years ago during the dot-com bubble. In 2016, JAB Holding, the investment arm of the Reimann family, took Krispy Kreme private after buying it for $1.35 billion. JAB owns a number of other restaurant businesses, including Panera Bread and Caribou Coffee.
"The transformation that this company has done in the last five years has been incredible," Krispy Kreme CEO Mike Tattersfield said on CNBC's "Squawk Box" on Thursday. "We've worked on our brand, we've worked on the culture."
In fiscal 2020, Krispy Kreme's revenue rose 17% to $1.12 billion, but the chain reported a net loss of $60.9 million. It has reported net losses for its last three fiscal years as it invests back into the business, such as spending $10.3 million to reopen a 24-hour flagship location in New York City's Times Square and buying back many of its franchised locations. Now, about 85% of its locations are company-owned.
Krispy Kreme's start to trading comes during the busiest week so far in 2021 for U.S. IPOs, with at least 16 other companies making their public debuts.
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02 July, 2021 - 03:21pm
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The stock reversed an early decline and jumped 24% to $21 a share Thursday. The Charlotte, North Carolina-based company, which is owned by investment firm JAB Holdings BV, opened at $16.30, below the $17 IPO price.
The roller-coaster debut reflects the volatile environment for restaurants as the pandemic subsides. Many U.S. eateries, particularly those focused on breakfast, faced a difficult period of store closures and reduced sales as COVID-19 led Americans to eat more at home. Sales at U.S. Krispy Kreme shops rose 4.5% to $733.4 million in 2020, according to Technomic.
Krispy Kreme gave away more than 30 million doughnuts to healthcare workers, first responders, teachers, and others last year. This March, it began offering Americans who show their vaccination cards a free original glazed doughnut each day. By June 1, it had given away more than 1.5 million doughnuts in the push, which is set to run through the end of 2021.
The promotion resulted in more than 7.6 billion earned media impressions, according to a filing with the U.S. Securities and Exchange Commission.
On Thursday, Krispy Kreme CEO Michael Tattersfield downplayed the stock’s early performance, saying he was focused more on the investor base than the stock price.
“How I measure it is a little different — when you look at who is the quality of the investor that you brought on in your IPO,” he said in an interview. He said Krispy Kreme has attracted long-term holders, including sovereign wealth funds.
Krispy Kreme on Wednesday raised $500 million in its IPO, short of the $640 million it had sought. The company had initially marketed the shares at $21 to $24 apiece, according to a listing document.
Krispy Kreme is aiming to add 1,000 points of sale every year, including stores, grocery cabinets and convenience-store spaces, Tattersfield said.
The company sees “significant” room for growth both in the U.S. and internationally, the CEO said on Bloomberg Television. Brazil, China and Western Europe are under consideration for growth.
“There’s 150-plus countries that we’re not in,” he said. “So it’s not about putting a flag in another country. It’s the discipline of doing this right.”
JAB acquired Krispy Kreme in 2016 in a $1.35 billion deal to take it private. JAB, an investment vehicle for the Reimanns, one of Germany’s wealthiest families, has expanded aggressively in restaurants and beverages and controls Pret A Manger and JDE Peet’s.
Krispy Kreme has expanded in e-commerce, which now accounts for close to a fifth of sales in the U.S., fueled by its Insomnia Cookies delivery concept.
Tattersfield said the company doesn’t just compete with other restaurants or sweets makers.
“You compete at times with the flower business. On Mother’s Day, the children would rather give their mothers sometimes doughnuts,” he said. “It’s a very different business model that doesn’t necessarily compete just in the food space.”
Krispy Kreme’s offering was led by JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp. and Citigroup Inc. The shares are trading on the Nasdaq Global Select Market under the symbol DNUT.
More than $20 billion of IPOs have begun trading in the U.S. this week, one of the biggest weeks ever.