Krispy Kreme Doughnuts Inc. announced on Monday it expects to report estimated revenues of $110-million for the second quarter of the 2007 financial year, dropping from a revenue of $140-million for last year's second quarter.
The popular franchise of doughnuts said the decrease in revenues resulted from a 17 percent drop in number of chain stores available, and lower sales recorded by the companyâ€™s Manufacturing and Distribution sector.
Sales fell around 15 percent in the second quarter compared to last years sales. Average sales per store increased by around 7 percent for Company stores and decreased around 8 percent compared to last years fiscal second quarter.
â€œWe continue to make progress in Krispy Kreme's turnaround. In the past quarter we resolved several legal disputes with franchisees. We reduced our guarantees of franchisee obligations from approximately $22 million to approximately $14 million and successfully executed pricing to offset rising input costs.â€ said Daryl Brewster, Krispy Kremeâ€™s President and Chief Executive Officer.