2024-02-23 01:35:26 ET
Summary
- Krispy Kreme is expected to continue delivering revenue and margin growth through price increases, specialty products, and global expansion.
- DNUT's margin should benefit from price increases, moderating inflation, and productivity gains.
- The valuation is expensive, indicating that most of the growth is already getting priced in at the current levels.
Investment Thesis
Krispy Kreme, Inc. ( DNUT ) should continue to deliver revenue and margin growth ahead. The company's revenue growth should benefit from the carryover impact of price increases from the second half of 2023 and further price increases in the quarters ahead. In addition, the company's sales should also benefit from the premiumization of specialty products, which helps attract new consumers to the brand and increase brand engagement. Furthermore, I also expect the rapid expansion of Point of Access (POA) both domestically and internationally should help in acquiring new consumers and increase sales volume moving forward....
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Krispy Kreme: Not A Buy Despite Good Growth Prospects