Krispy Kreme Doughtnuts (KKD) Matt Pregozen
Krispy Kreme Recommendation Buy: Limit at $3.65 Sell: Limit at $4.35
Background Vernon Rudolph bought secret yeast recipe from a French chef in New Orleans Expanded from local store to nation wide chain of stores Headquartered in Winston Salem, North Carolina 580 stores worldwide in 18 countries 93 company owned and 430 franchisees 2,700 full time employees Source:
Business Operations Retailer and Wholesaler of Doughnuts and Sweets 20 varieties of doughnuts (packaged and unpackaged) Sells own brand of coffee Sells equipment and supplies to franchises Have donut fundraisers with youth groups Source:
Retail Standalone store with seating Makes donuts fresh in store Source:
Wholesale Sold at supermarkets, convenience stores, gas stations, Wal-Mart, and Target Deliver boxed doughnuts and unpackaged donuts daily Source:
Stock Numbers Current Price: $4.21 P/E Ratio:N/A Beta:1.86 EPS:-$ Week Low:$ Week High: $4.75 Market Cap: $256.94M Institutional Ownership:29% As of 3/18/2010 from Google Finance
1 Month Yahoo Finance:
3 Month Yahoo Finance:
6 Month Yahoo Finance:
KKD (Blue) vs Starbucks (Red) vs Tim Hortons (Green) Yahoo Finance:
Competitors Dunkin Donuts- Privately owned Starbucks- coffee shop with 8,800 worldwide locations ◦ Over expanded- downsizing and consolidating ◦ Current products are too expensive for consumers Tim Hortons- fast food restaurant in USA and Canada ◦ Saturated market in Canada with 3,015 stores ◦ Expansion in US faces tough competition Source: watch/2009/01/starbucks_closing_hundreds_of.html and _ _N htmhttp:// watch/2009/01/starbucks_closing_hundreds_of.htmlhttp://money.cnn.com/news/newsfeeds/articles/reuters/MTFH12232_ _ _N htm
Social Responsibility Gave away free donuts during 2008 Election if you voted Source: stuff_N.htmhttp:// stuff_N.htm
Reasons to Buy Job market is recovering = doughnuts and coffee at office Rumor that Wendy’s will buy Krispy Kreme In the middle of restructuring, so future has potential Upcoming Earnings Report 3/29/2010 Source: RT_ART_ _A16_MPFQ789.html and RT_ART_ _A16_MPFQ789.htmlhttp://investor.krispykreme.com/
VAR (Value Added Research) Original Glazed Donut Taste Test LabelVotesBrand A13 B5
Quote “Donuts. Is there anything they can’t do?” -Homer Simpson