MCD - Krispy Kreme Partners With McDonald's To Accelerate Growth
2024-06-12 09:14:49 ET
Summary
- Krispy Kreme has a track record of impressive growth with ambitious targets for the future. The recently announced McDonald's partnership and expansion into Germany should accelerate growth.
- The deal with McDonald's will be gradually rolled out beginning in H2/2024. I believe that the deal's margins for Krispy Kreme should be looked at critically.
- Growth-related expenses have weakened Krispy Kreme's profitability, and high debt leverages the investment as long-term margin uncertainty exists.
- The current stock price reflects my base scenario financial estimates. Still, long-term margin uncertainty and high debt make the valuation highly volatile.
Krispy Kreme, Inc. ( DNUT ) produces and sells donuts and other dessert products under the incredibly well-recognized brand. In addition, the company also sells cookies through the Insomnia Cookies brand that was acquired a few years ago. In October, Krispy Kreme announced that the company is exploring strategic alternatives for Insomnia Cookies though, potentially selling the prior acquisition. Krispy Kreme’s operates in the United States and internationally, and is constantly expanding to new markets to fuel continued access point growth....
Krispy Kreme Partners With McDonald's To Accelerate Growth