Struggling doughnut shop chain Krispy Kreme Doughnuts (KKD) on Monday reported an unexpected quarterly loss, hurt by store closing costs and sluggish sales, and its stock fell 15.5%. The company, which is facing a Securities and Exchange Commission investigation into how it accounts for repurchased franchises, also withdrew its forecast calling for systemwide sales to rise 15 percent for its fiscal year, which ends in January. The quarterly loss is the latest in a string of troubles for Krispy Kreme that began in May, when it posted its first quarterly loss since going public and cut the number of planned new stores, blaming the low-carb diet craze for curbing appetite for doughnuts. Some investors have also suggested the company expanded too quickly and the one-time darling of Wall-Street has lost 80% of its market value since its peak in August 2003. [Source: FoxNews]
Here's my question: Who are the idiots on Wall Street who valued Krispy Kreme at $2.577 billion?
Subscribe to:
Post Comments (Atom)
1 comment:
I think it's the rapid expantion more than the low carb craze that did them in. Investors saw gooey gold during the exantion period when people would wait in line for hours just before a new store opened up. I guess they interpolated that the initial interest in getting those little gooey pieces of paradise would be sustained after the initial opening frenzy. They appear to be wrong.
KK needs to merge with Dunkin Doughnuts to create the ultimate doughnut (KK) & coffee combo (DD).
"Mmmmmmmm do-nuts" /obligatory H. Simpson reference
Post a Comment