It was only after three years of year-over-year revenue and gross profit growth, 18 consecutive quarters of same-store sales increases, and an eight-year high on the stock that Krispy Kreme Doughnut’s (KKD) executives finally turned to one another and acknowledged that they had turned the company around.
The hesitant optimism at the doughnut enterprise, best known for its Original Glazed doughnut, is understandable. Krispy Kreme had been a growth company before – until it imploded in the mid-2000s. Profits tumbled after the company grew too quickly, and an SEC investigation of its accounting practices led to high-level departures.
A previous unsuccessful turnaround attempt led to talk of having to sell the chain. “It was just a constant turmoil of, ‘Is the company going to make it?'” says CFO Doug Muir.
Krispy Kreme’s anxious past has informed the company’s current strategy, which has been predicated on slowly repairing the business and building a foundation that protects against future blowups.