Krispy Kreme (DNUT) 22 Feb 222021 Q4 Earnings call transcript

Hello, and thank you for standing by. Welcome to the Krispy Kreme Q4 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator instructions]. today's be that advised be conference recorded. may Please instructions]. [Operator hand over Vice to I of would speaker conference to like Ballew, now your the today, Relations. Investor President Rob Please go ahead.

Earnings welcome today. Kreme's everyone joining to morning, you for and fourth-quarter Good XXXX Call. Thank us Krispy

release accompanying earnings earnings on are presentation website our an portion Relations Investor of and at fourth-quarter deck available Our the investors.krispykreme.com.

Chief this Charlesworth, Accounting President and and Officer, Josh Chief Joining by and Josh, Tattersfield, Joey After Mike me answer Chief there a Officer. Mike Pruitt, on prepared remarks will morning is the question Officer, Operating call session. Financial and Executive and be

and I Before Reform including XXXX, of pursuant begin, call the Act will expectations, remind forward-looking statements or future future would we Securities you to that of this financial Litigation like to provisions performance. Safe of made statements Harbor events, contain Private the

involve Forward-looking in in and caution risks and detailed that the these a inherent and materially uncertainties Form statement other uncertainties, company's those S-X. of actual differ we statements These on risks are factors investors forward-looking to statements. from called number and risks and registration results any contained

made today assumes obligation any as publicly of speak today. no required revise as The forward-looking update company or may except only to statements, be statements law. Forward-looking by

financial is which I over to call found release, call on be investors.krispykreme.com. can a Additionally, first measures, include reconciliation earnings now closest at non-GAAP press will today's measures GAAP and the With measures, the certain will between Mike. their turn non-GAAP financial available quarter that, Company's

the have to enabled five our the team becoming quarter we've at our I we're during full-year transform want each Krispy start the results, review thanking strong everyone every Krispy us of more they've continued efforts and Kremer's, our here business in you and Notably, for our advancements done customers to dedication world. to worked fourth treat difficult members, the XXXX past time thank and over business Kreme day. today us and years. our share their complicated joining this We're and and on brand sweet to produce globally. Their morning, pleased about group today. very for by most-loved to journey amazing to Good results, making and a our our

this We Krispy of of continue to world. environment. which us attract give our care to company to central our The our to our take others our in Krispy us this Kreme; will mission. lives day, every which and that's labor Kremers around communities excellent turn of to back joy through they people, truly of to enhance the able is challenging operating allows the is the purpose Krispy we're impact helps quality the mitigate work make happen. do to This the Because Kremers, of

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the path to us gives growth significant a have years. coming also a We that clear in proven strategy very

year. in the We XXXX, was produced by and and the full evidenced objectives progress our were our range. of above operating long-term quarter in expectations strong performance financial which our guidance the our results our at performance or to and Turning top-end on fourth

hubs of gives combined in to leverage pricing, Every purchase people spoke ability U.S. e-commerce the Our across world-class hub around we doughnut increase capabilities spoke our to and day, our doughnut and world. doughnuts core by The the help time on points fresh where with buzz-worthy, increases deliver strategy of access offerings fresh in are in efficient model, the these omni-channel price business. several hub us including millions and global our assets XXXX. limited matter, markets model unlimited season with a of strong supported and of frequency, capital us

driven fourth and and X.X% by spoke for on grew our and key XX% metrics detail X,XXX a we year. grew of revenue revenue fresh $XXX.X million, into minutes, Cookies. with than XXXX year. and to presence the the with highlight in we of more an XX.X% In segment, over and outstanding our few XX% full fourth I a our While EBITDA points our points the us grew also wanted bottom to our strong will increase global for organic by the increased adjusted to Josh strength more Insomnia to our full-year points business from X.X% XX.X growth XX,XXX; our legacy results were over the revenue increase for hub access The in few business. the go year. to Organic by of and wholesale by a of Growing across our In demonstrated EBITDA basis increased allows the year, our Canada line, by and model performance, or excluding on globe. the exit the XX XX.X% US quarter adjusted XXXX, was efficiency for pleased quarter, the as margin we

XX.X% XX.X%, Excluding exit, U.S., wholesale for periods. those Canada grew organically time and legacy the respectively,

the improved access global at This launching the thanks branded XX,XXX fulfillment roughly in as Canada. fourth in the and to expect in made led treats XX% team. the the the sweet business month of from notable sales the since Walmart. to being XXXX points basis quarter to XXX consumers highest treats on have in our continued in than we new quarter. bringing progress XXXX. sweet improvement from ports These products see for to EBITDA the this adjusted December profitability now Our over branded revenue third significant TIF we expect in by in X,XXX with XX% we X,XXX supply Hub and of chain scan where model and We added grow and fourth the XXXX. DFD Spoke rates quarter to more to to treats margins in us for quarter and year, allowed branded efforts to points expand us & We gain to in distribution of our U.S. momentum The over his continue sweet resonate

Cookies, revenue. XX%, and Insomnia than cookie excluding digital to Revenue store by company, Turning completed XXXX fantastic which new year. XX% another for Insomnia nearly our first by more increased for

We continue plans on see over to grow time. brand over as internationally well for locations the incredible domestically, we opportunities with are to to our XXX way

two-year We our international a entirety grow pre was XX% of international growth significantly and Organic the well strengthen is a on truly in appeal quarter and levels. our across past year and significant XX% brand. segment. beyond see growth segment of segment basis, continues performed worldwide for the business, Our the for an which ability stack this -pandemic exceptionally grow grew outstanding our to the revenue year. highlighting runway to It the

today markets, on to achieve each we're of strong quarter average, put to million points in our X,XXX global about in development us of initiatives. EBITDA and than segment. XX fresh U.S. approximately adding growth. the and system primary in comes single total hub loved organic for of another the saw XXXX. are up talk to and of a of is EBITDA from XXXX, international million $X.X Let's per XX% hub. from performance. points access of our each Kreme, added adjusted our And revenue of half leveraging hub doors with truly our grew access is of high-growth outside more brand. Sales more $X.X spoke margins. XXX few XX% sales a the of hub market which bringing more without internationally roughly growth international all able than Roughly year, segment exciting adjusted our We proven Krispy than We driver model international a The equity XX% more a

Going very pleased we at am opportunity, expect least partners announce Switzerland open up to for to and open specifically, hubs will in Highlighting year. this forward, three we Chile. year, now I later we this new adding Europe Krispy us are South countries franchise that per venture and America. More Kreme in new two

we model. line now partners existing our enter a countries, addition, new In have have of into sight that strong proven expansion to direct

for we efficiently, neighboring and international your balanced we leverage in the to realize of reach. wants profitability to expect access up us can also not great This and country We working entries core deal allow This scale, where to to runway coming compromised will consumers. partnerships. see particularly Overall, a as announce markets equity of are existing expand total months. approach company markets brand quality and in both while further result, franchise economies and is increase a more growth opening

that a benefit Day on capabilities, our year. day to the growth, Turning pre our our core with promotional fact increase in directly and majority e-commerce, over a pillar global e-commerce long channel our activity up came strengthen through retail XX% to our XX% e-commerce In by continue the term. of in XXXX, drivers of of our XX% achieve from of is exemplified from drove Dozens few omni-channel -pandemic from the to sales sales channels, comes other business We of less of that the as XX% December e-commerce from e-commerce a than our goal we a from prior penetration over strategy. our own recent

drive as us access. initiatives and of to these the Halloween addition segments be matter, XXXX, remains be touch our XX% Valentine's to we the products. teams relevant sweet of of us for also our would consumer our for most and the around and holiday our the customers continue right as and significant our activations In events, events. special connection appropriate marketing, XX% fourth of fresh, treats The pricing more power, combined across Chinese of opportunities such capabilities unique in and to significant a points globe. buzz-worthy top Year the sometimes by for premium, product, support strong storyline In example celebrate successful frequency the that we with and quantities growth celebratory item business. is across per really give to which hit global with spot capabilities packaging, opportunity driver rigor, the general, to our which doughnut, larger of customer. New omni in be another sweet occasion were e-commerce, These Day, in to our growing, and which model. guest individual rally including The and the and points event. up our introduce these extremely driven quarter. innovation sharing celebrating, a All glazed for e-commerce gifting than really gifting Innovation in happens branded see seasonal key and for recent across way. events -channel premiumization growth emotional of and of globe our business one our Kreme operational purchasing assortments branding had seasonal Krispy original create when offerings leading winter matter We scalable treats brand the blending XXXX, innovation, keep In across and our purchases

completed power we shift and XXX% which purchase in early pricing model, increases Finally, frequency. XXXX fresh to our

daily told globe. the our in is to is to freshness; hub it's customers treat be for have utilizing sweet twice and fact, important model just that spoke its the price. able significant the freshness a scale with attribute important customers us Krispy today Kreme Our purchase delivering versus most as proven across

$XXX Looking and the opportunity. growing. significant beyond, We we operate global Today. at which upside sweet is see currently indulgent category, in billion XXXX a and industry

growing countries Those of and million target years, grow access can access than are to we more XX,XXX stores XX,XXX to access our way. annually, We're just that we XX,XXX of the existing we're or efficient grocery points points in or We countries targeting X,XXX of more of points have the we by confident but a a a XX% points fraction year us than combined enter. in just drive expect over over our our increase. access currently at hub to will key a driving or of significantly gifting. Xx We from convenience with grow in of special coming least and X.X frequency the occasions in points capital just A operate access, sweet points to We'll least plans on increasing and be an growth, for allow forward. will e-commerce focus with and to maximizing The access by sales three frequency per innovation. e-commerce when plan opening on current of annual countries increase increase at in profitability. driving capabilities while treat efficiency our continue now basis our purchase

In addition, LTOs brand fresh and will new engagement doughnut drive premiumization.

also exploring with a where our existing from successful expand our the XXXX. up have coverage. After capabilities access the in e-commerce more delivery This for efficient achieved capabilities are U.K, in the us delivery a coverage Mexico than dark allow into We we now XX shops, are manner we in to building hubs. will markets new points U.S. capital and national pilot

believe hub up which double-digit to We fresh opens further ensures Combined dark inflation, initiatives back our efficiency strong will COVID on distribution Our growth and year. and and will allow shops access while routes, challenges, existing offset revenue spoke customers. will daily of these challenges margins. more and pricing, generate spoke organic us model to doughnut continued this piggy labor with on flexibility expanding

the to the the over five through excited most working by continue I continue and treat you journey spokes model. operations. show are to we brand Ill I it our XXXX again build new XXXX, turn how become world. we strong transform our reiterate confidence Josh our and now achieved about business, want walk last in advancing and and hubs and performance state financials sweet in once omni-channel in to to accentuated we U.S. we're Josh. the to our over loved growth years, that strategy in Before the up, our wrap as in is our our to The the outlook. transformation globally, Particularly enthusiastic

made are the morning, thanks our to Good the of week results Mike's the excluding XXXX. with by Krispy strong on growth, $XXX grew XXXX, the everyone. the hard In we've how on Thanks, Kremers. work revenue million comments we net quarter, and of strategic XX.X% on initiatives in XXrd Mike. to fourth in start XX.X% echoing year-over-year our additional I'll pleased or impact an progress

saw net of XX.X% grew fourth a across full growth and to XXXX, excluding revenue we in revenue For local convenience XX.X%, shops and year, most the all our We strong e-commerce, in the XX.X% doughnut $X.XX billion. cookie world exit grew grocery the XXXX. quarter stores. legacy from doughnut fresh to daily deliveries made and in wholesale Organic for the robust a through or

was disrupt strong Omicron revenue December, on significant, in saw remaining we operations our Although the impact all demand our channels. across with not sales

year, XX.X% revenue on basis. XX.X% or the For full two-year a grew organic stack

grew the organic for wholesale Excluding XX.X%. the exit, full year legacy revenue

XX,XXX. points In hub was performance quarter, to year our during strong and XXX model. strength increased Our driven by the efficient capital the the of and spoke the quarter fourth access global by we of

than the For this access year, points we full more that by of means X,XXX. increased

drive year, fresh by $XX,XXX XX% more and and in overhead merchandising points $XX.X at to September increased only per the November, to million, hubs are spoke our commodity offset world, expect recent experiential corporate cost as which and stores quarter, dough doughnut than add expectations. offset In low most fourth around and will Hot labor as These inflation, points of from and We to Light allow of which increases local than to increased costs inflation EBITDA efficiencies Theater more in above believe short-term to more enabling and that we adjusted XXX primarily well increases, our cost Hub public is increases the in least daily of deliver adding convenience economies shops. are fresh XX.X% cost grocery and expected. company us continue the if incentive pricing review and scale production $X,XXX typically driven pricing rose Going doughs. forward, to through XX we compensation. XX.X%. margins units quarter us will access to actions basis Adjusted EBITDA price each

basis year, the to XX.X% adjusted XX.X%. EBITDA margins million with full For points increasing $XXX.X increased to XX

in the reminder, a diluted diluted net outstanding a the quarter, income Adjusted same average XX% a GAAP As In was year million loss achieve net or IPO. or $XXX quarter increase. to $X.X net of were for to shares for negative was EPS GAAP margins $X.XX EPS XX% diluted EPS income fourth Adjusted was from quarter $X.XX the count year-over-year we $XX.X compared period the the $XX in XX% the fourth company-wide XXXX. share million due a of the Weighted quarter million. million, ago. expect to decline a in $X.XX, increased diluted

fourth a in the year in business. million, our increased and doughnut sales the XX.X% additional and daily robust stack X.X% growth demonstrating the on for saw And two of basis legacy XX.X% the strength price November of quarter or fresh our fourth our quarter, loss net channels for the GAAP were of also increased the $XX.X year, successful, $XX increases fourth to all to a XXXX U.S. IPO our quarter. Adjusted net performed week. well excluding a XX.X% Organic XX.X%, September impact of of proved XX% with cost cash diluted delivering XX% to by Canada which us times, revenues positive segment, year. million, free compared full In We cash prior increase $X.X XXXX. the reduction the million million year impacted declined in an was a $X.XX, and debt quarter. the versus again For X.X flow, wholesale was helping We XXrd business. the total of was Organic quarter the to is during exit which the product excluding growth the EPS leverage lines finish or in $XXX the quarter.

I I in organic XXXX. to highlighted doughnuts benefits XX.X% which The in $XX.X fully increase wholesale and XX.X% local covering organic delivery these and November, costs then growth daily are benefit our that stack, the full price sales was per of the basis led margins, we increase fresh fourth-quarter hub XX% business. the over a legacy exit basis driven the over commodity of franchisee This U.S these in In by pricing offsetting in EBITDA local to achieve to Canada and XX% the the by compared the two revenue goal in million XX% the cities margin of The XXX% with a margins, of XXXX XXX of of ago. and compared a are the year-over-year. XX.X%. also seen Adjusted per and to growth doughnut has And will strategy and increased U.S. the X.X% growth implementing more within growth previous The model margins, from years. other U.S to XXXX showcase success DFD segment million $X.X $X.X acquired quarter door, quarter. the on cities, basis points growth hub with points in door, XX% production our now expanding fresh fourth first to business. to hubs. million, increased achieved in XXXX Both and and biggest to in U.S. deliver quarter, per $XXX DFD which daily gave increase confidence by increased U.S the the an fresh there, Organic U.S. XX% wholesale per of for Canada, This Especially which our seeing the the the especially by at to with fourth wage example increase XX.X%. which efficiency has previously U.S. in in margins million to or the This inflation. point XXX year sales to back $XXX markets works grew U.S. change Canada high to Canada, DFD EBITDA grow is the local year-over-year And to margins that million, was and of showing Revenue the time, implemented more in revenue driver the revenue revenue in a market, have forward. year-over-year ability how proven has was in Canada per which fourth Tampa EBITDA XX% a the adjusted three in excluding For $XXX e-commerce our X,XXX, our the access cities in in a was markets, quarter than model, week by in for and segment to going which XXX the the Albuquerque for for DFD former door year of hub total driven quarter. increased driven year, million, due higher strong $X.X explains revenues - door time. averaged million legacy to level EBITDA XX%. fourth $X.X expansion. the continued increase in per in Points points a international fixed were spoke market, I XXX than with

to to both in expect EBITDA access One doughnut of for our first came time business. program points U.S. margins from U.S. XXX. full XXX we which Hubs the existing five cities. about increased XXX our XXXX in and expand and with the add Canada on of our this quarter U.S. and business, as the adjusted has for in We year during new fourth now digital spokes quarter in and par milestone quarter the the by the first fresh Cookies Insomnia

to growing for brand. this see continue We tremendous potential rapidly

to reduce profitability per quarter also turn in treats, business, which more on whereas doubled We fourth than saw our us startup our the capacity has unit. production our cost in good this helped branded in year, sweet progress

revenue treats as middle on Net be track the segment, and profitable quarter grow. profitable to XX%. the revenue Mexico on to while XX%. XXXX in grew of the was considerably, organic yet reduced a sweet fourth continues the Australia, remain equity Zealand, our not losses the in of in international and by New growth fourth quarter, to branded stack $XX Organic basis revenue in grew which are XX% markets demand Ireland, two-year While consists million, UK, our we

to net XX%, while fourth the in $XXX prior the grew line million organic to the on quarter on year. International two-year a adjusted million, stack grew for XX% XX% For XX% $XX.X grew XX% with revenue of basis. full-year EBITDA or margins revenue

year, $X.X from over the full grew existing the to for XX.X%, doughnuts in high adjusted in $X,XXX our the deliver to quarter. Revenue DFD of access across driven fresh For and expanded XXXX which segment. of was the EBITDA XXX points access. driven points to million more Leveraging Adjusted spoke hub year $XX more the EBITDA the million for points year for international to increased basis more XX% hub strong model XX per by XX $X.X international of XXXX. our of margins gained profitability of explains the all to omni-channel door, in from hubs, model. of our our sales the and XXX markets. performance million, strong by the International per efficiencies performance levels

Turning our revenues up the X.X%. made quarter offset and to markets now and Japan, organic $XX.X owned franchise performance franchise which million, business Total market. partially is was while Strong in franchise fourth revenue to grew Japan in of equity our acquisitions. our grew market X.X% by development segment,

flat $XX $XX at X.X% while XX.X% year the in but $XXX EBITDA quarter grew organic million, to development development market revenue was million. to million, revenue Adjusted grew for year, the XX%. year increased the the market for for For full

growth very potential, which is our reflected to optimistic XXXX be about in continue We outlook. our

growth revenue above expect between XX% organic we XX%, our and between nine growth XX%, XXXX, and and of is long-term which to For guidance XX%. XX%

the this reporting access will contribute business reminder, And a to of three DFD longer points have mostly we XXXX. legacy doors. all wholesale our more to be XXXX, X,XXX no in We lapping to segments in plan expect as We growth. exit than of

income million, to between - anticipate margin and to adjusted We rate to an net adjusted $XXX to XX and and faster segments. million and of XX% international between with the expect XXXX. income U.S. in Up tax to a increase and in than diluted $XXX both sales grow expansion XX% $XX an We Canada, XX%, XX%. XX% $XX EBITDA

to the adjusted year, in count $X.XX. year. dilution XX the XXXX share impacted diluted half it of to to IPO EPS is remember will that We last first EPS by in expect be from comparing of When the important

XX%. impact, adjusted net similar to of adjusted will growth EPS that Excluding diluted be the income growth XX% to

do we growth benefits increases, our hub [Indiscernible] not traffic provide come spoke subsides, the accelerate in disruption York continued will as through quarterly of through. New of year, the branded guidance, full earnings general, and sweet COVID profitability While model in QX the treats as which pricing high. we seen only our events inflation operational we modestly needed. higher through a January, continue absorb improves, of have winter to and number from weather In some usual, disruption Demand dampen and results. Omicron will than remains to

In revenue XXXX, to $XXX to For XXXX, for the X% below drop impacts year. expenditures; X.X% million of example, on $XXX we that to we saw these be good will spent believe growth for Valentine's Day full not so around I in significant capital million. do

as or a XX as to mostly a than year to expect the below includes production revenue decline hubs, times XXXX, experiential approximately of Our in shops, below. down three CapEx continue pay locations. expect time, CapEx long-term investing Insomnia Cookie to we'll to XX well In two end approximately X% XXXX times. as Light and goal leverage, debt with of we more percentage Every Hot

XX% sheet over balance in more approximately XXXX revenue XXXX, to and declines, free EBITDA and also our cash we XX% in improve than our as As grow from to our conversion flow percentage a to increases, XX%. time, of improves, expect our CapEx

XX% annual we net to revenue can XX% up XX% open and annual organic adjusted the continue Q&A to we to remain to Operator, now, Lastly, growth. annual confident please. growth, to in income X% our algorithm growth of XX% EBITDA growth, adjusted long-term diluted call XX%

instructions] Stanley. first Thank from [Operator comes Our Morgan Glass of you. question John

question. your with proceed may You

Good Thanks morning. very much.

Josh, First, high-level just question. a as

correctly enterprise or I XX% heard year for me that's XX% it's but think correct that around EBITDA this FY correct? the you 'XX, I be if minus. if think should I'm wrong, maybe I plus margin 'XX

the what that -- FY large that a FY in it's or I in 'XX? that walk gained FY particular business, understand the would drive would versus but step-up. I So Thanks. in drive pieces there the -- 'XX in EBITDA anything assumed efficiencies in the are Can step-up 'XX just bigger through is what assume you that

are implies Thanks And improvement call model. we've earlier a up -- around right. seeing margin. Hi, John. in the spoke to add to hub and margin branded although in question. to about leveraging sweet On top the business, strongly, New you're from well this guidance -- e-commerce as become to long XX% the continue the And point we around which deliver margin. And continue that, the expect hub as given as in XXXX, examples small, continues cities the model. run. markets drive profitable is spoke daily, like basis the they're treats to grow and up we we York benefit I going year, also the for of fresh gave

combined those U.S. give of us confidence and profitability, the to Canada all So segment. level the that in long-term

I the enterprise in XX? to just verify that. correct, -- goal, your But want was Gotcha. an XX

international U.S. Yeah, absolutely. ongoing pleased with the profitability driver the that and in And right, the very is of biggest you're hence I XX and overall. think that. momentum We're

is that can what Canada? offsets so you've And price in P&L inflation, what finally, assumption in just couple that that inflation how is And FY overall your we please? the a gauge of and taken on pricing U.S. that 'XX now? now increases the the you. is in Thank full What running

line The guidance price we've has year year with manage to Yes. business cost U.S., like assuming is XXXX. actually price across the effectively inflation, lot side, treat sweet in of did talking Most QX single-digit our both we oil year, we we does we've given inflation we on We're the from if that because specifically XXXX. deliver that it's that the than question, price ourselves, increase on for through with a to your increases we increase environment price that ability see premium obviously gasoline and have XXXX. wage here I covered that the assume for have choose, November double-digit referenced about that we And high already. half average on can year, of X, you already XXXX; stable increases. world. confidence more are margin accelerate sight covered manage now. grow in mean, the increase the today the been ended able in needed, to single-digit to and great the on if we the we further high margins it for After fully means have sugar fresh a more our still That of that through of shown so input

it. you. Got Thank

Thanks, John.

you. Thank

JP with Ivankoe John from comes question Morgan. next Our

proceed your You with question. may

to of doors the any amount you. of in the of accounts. in DFD expecting that to learning that if that types profit you terms the in Thank there can in down noticed if higher in is more the wanted the actually DFD Hi. kind third. that doors U.S. that in the fourth focusing fourth just fewer relative fiscal DFD see as in segment confidence symbolism to profitable decline the quarter accounts I kicked increasing is I generating in if the 'XX. quarter have of increase on your put relative you're we're And you

XX transformed those that deliver In margin for It's legacy the traffic less locations, daily high international months. the fresh a to thing. doors XX than important in DFD U.S. markets doors Sure going the in wholesale really expect. low, We've over completely we very churn last this very, from on And business X%. always through transformation we're to growth and that us, deliver

as the go grocery we've well and the we stores go overall, in below lot stores, definitely the transition on that still we XXXX, But in convenience have is going occasions. dropping. As a X% and the aren't as and seasonal through QX churn has doors learning efficient. identified been

great And to got for so already was New in the in, it me XXXX. doors reference We've for it. going Year new

the cities new internationally for U.S. XXX expect the and the year, Good doors in X,XXX We world. and and DFD the U.S. good on first Key full DFD. progression. of customers, over with the margin our momentum XXX quarter driver across in growth across around momentum

that just sure what consolidated and in your sizable a you case make talk but sale clarification It well? about EBITDA, And as may, the I to the in excluded There a like from look I that does it's wanted release. quarter, just is adjusted levels was if was was? segment leaseback this from fairly could the the gain

that, Do with me Joey here. have I to Charles. Hi, you reference want Sure. Joey? just

Sure. Yes.

So we leaseback add generated did did over for a little gain quarter GAAP adjusted It us. $XX of properties the few a that back fourth EBITDA. have the a sale $X.X in for in cash million was we an million

that make appropriately. to wanted was sure represented So

Thank you.

Joel. Thanks,

you. Thank

with Bank question comes Sara from America. Senatore of next Our

your You may proceed question. with

of dynamics you to access maybe Okay. some about Thank I much. underlying in happening your point. very ask wanted the

product but disruption persist there of was trying you coming just So think a you from say maybe to to quick channels lines whether Omicron, from did Just benefit then, either in mix did you as mix any there's or quarters either understand in a have any demand a saw, reversal higher sales you DFD to sales dynamics other? there or I some that. the from volume shift were any and normalize. see -- or all markets opening there performed and drive-through that mentioned patterns underlying bit And the reason they and follow-up well, there's

Yeah.

holiday. it there. the go first mix saw expect to assortment, even on as impact businesses, around from as well. that the things a moves you the happened just and the minimal drove in demand continues its you'll of particularly really pickup as well. so really saw one They business start COVID impact whole, exceptionally we the as did seasonal it Doughnuts a bit really fresh the thrive. holiday quarter, DFD in around, did the the to a you assortment curve approach, also that business the you get that our of or see When So assortment Halloween and in see off, saw They

inside even the value So anything it you we do. get it can continually see, what that February, approach into you They in the when see to starting approach the DFD gives the pricing of of as want apply ask work. else into the We [Indiscernible] That's in mix, potential time. choose can the you year potential as the DFD drives to we we this you you assortment business that have, more choose have really and assortment want business. you different retail, the how of omni-channel same can assortment than When customers fresh is January you an to can DFD that because can drives parts you fresh, all that assortments channels want the you of even the have and well. choose the number of in the one idea delivery, the attribute have how us the

U.S., growing all in overall, is channel daily. on And channels Sara. your grew [Indiscernible] In fresh obviously see contributor we of perspective. to just to quarter. the biggest which biggest a delivered fourth big growth though, the driver the the add mix is to e-commerce, the That the it But question actually

growth the XXXX that we see expect accelerate coming of impact a bit see point year drive-through coming we big, lapping the a to pandemic in prior from shelf a in through, through. growth We XXXX, we big of we obviously insomnia and little versus are view because the coming see through,

and across the of international. channels it's a in those all So, growth U.S. balance actually seeing

it's profile now a selling into. that we're So balanced quite

lapping of in that be hence year well. XXXX, no of through exit will longer should the reasonably and as Now, legacy the course even business, we be wholesale our

impact about most improvements rates you have to just chain, just talk which you. perhaps Great. managing margin, to Thank an any talk difficulty Thank you. the you've to made in as further? mentioned whether improved offset treats, and done for be is on the fulfillment fulfillment about could Very supply helpful. And supply, sweet what's restaurants improve had that interesting then, left you because

Absolutely.

now supply bites thanks sales. segment convenience than make business, the able Walmart we is and to and referenced, branded significantly A startup which to the other XX,XXX we as over levels with with middle instead, as even the made in we're as challenges great our additional third profit improve crullers. treats had efforts a and profitable quarter, definitely less still that team pandemic, launch In we Demand line business, mini for sweet points Canada on-shelf branded and on Mike it made quarter, treats, continues and of -- the in and X% that, to impacted U.S. had doughnut grew referenced, A in and profitability. we'd our it the to in great. to not manage we than the by into stores, profit expanded, keeping of which was build faster reduced fourth record XXXX launch fulfillment chain we suffered to Our increasing is the grocery from products QX, lines. grow, QX. that the sweet We're put we'll which across Mike we're impact move now able we're as continues up distribution U.S. demand -- production

long towards will potentially and be progress that that in maybe with even pleased we're accretive So we the what are pleased margin, run. business moving a

you. Thank Great.

you. Thank

Palmer comes Evercore. next Your David with question from

with proceed may your You question.

the on per Question sales Thanks. hub.

it in been points out-the-front can door sales hindered, out-the-front door just the distribution that York, percentage just of and Do call that your have hub overall easy growing have in the sales this not we an you do per imagine have maybe You view New hub, door sales. per out-the-front you sales? as How you caution? by points some in recovery like but could markets come COVID in from much

every about assort the So Valentine's Halloween the happen, David, particularly thrives When we events you box, think really about gift. of that around our think impact actually is right from access it's it. a happen, because that's Day of a the question. good We those really it. to when purchased now, how so see in when just not want COVID. seasonal We're can When business XX% do you when brand know dozen happen, actually of that. happen. People nature holiday gifting

at and in did e-commerce. business day something see this actually We channels up in also actually just we're did dozens. channel. sometimes the We delivery increase the the we we to drive of when in can play can XX% the XX-XX, which on You something

So we moves to the our ability around have that. around customer move and

even days, operating I January at lot testing we Our of that used engage we've operate, and number lose with see because impact but X% it's recently. the day a Kremers be it our purely they of change sales. our we brand. But sure every just for make positive we one week can up we to partial don't to less last and Omicron that. estimated Omicron when is we Yeah. didn't so December demand can operational unfortunately -- Krispy in disruption When from focus There's really a that around do shift how want see I and how when customers Krispy and around, our as just the safe of massive referenced they opens than Kremers that no disruption,

double-digit not us. business, it's change for meaningful just a for growing a So

growth of And gains? a the talked those. double-digit distribution just follow-up on You about points on then,

the that One stock in of the about feedback that of parts that into pipeline and the being growth there's distribution have comment we of hard big the and a get the points people that on distribution Is moving any of sort sources of your that of this company time growth? a Thanks. and part confident can points is visibility a of is that. make about you there you lot have double-digit

Yes.

And see of today, better they and segment between actually one the clear that then as is is of market. itself urban or we the XX,XXX the there of spokes that, the single we're market what's see in you XX,XXX to into it's Canada XX how really to up drive shifts to really market have XX% core international it's that has even inside grow U.S. look whether will that about split an so will of sometimes we see is there. return XX,XXX we XX on Light sight. in it's as another the of points a XX,XXX just mix What the markets about get Those able everywhere the between a international shop, apply pretty that model segment, of comfortable is and which customers. a comfortable are existing where different. really will every the pipeline line across that a We those the markets drive, optimizing development country, about think But an is U.S. today how access. if the to We're are U.S. grow. we market, if are is of and that shop you that It's you particular is urban the at in we year. to even lot Hot simplicity so pipeline and proven you'll if see itself a So from model, XX talked that we and points our which international access. the get you access, another and will It leverage, depend the markets, potential, points

past, also a hub past come simple right? as privilege shop, the sweet As treat the almost same-store and start just to start we consistently. had are to execute we want is the say that actually to is when year to then they sales, spoke years, customers opportunities, is people like we sure to get up open omni-channel shop, DFD we've life. six model. seasonal not where hub we is to have and very making this typical that's and which for to and run can seeing see of the whole part, through franchise doing And how models, the spoke run a doughnut the in The maximize starts they the public this become now and how which really you to system around truly which this model about That

I'll pass on. Thanks, it

David. Thanks

Bank may question next proceed Deutsche Mullen you comes Brian your from to with question. Your

you. Thank

last year the looks units, from net an to you Just the what perspective, you operational with that to think pleased there you you just a about growth. you on years over Can that they then question units several related have into? of something to grow how to of you pace Insomnia handled XX think of development do XX growth added pace unit And get what on XX% saw? are business next basis, ability kind XX is like the could you the speak business. last year a It

talent. can management scale, bench start manage know they starts be pacing get the to the they growth. to right Yes, teams They the so the as start to I able to amount. have

not they've be In model, now, that there's the managed as their opportunity the and potential cookie urban see these That's the in about in continue at about that business, because -- do long-term size potential. collegiate. the about that start which Right just shop what's gifting also grow, as fact, well to even they've just shops looked the market it's right, as We they we've continue the XXX version we delivery to seen how performing, is a they probably XX like they well. a shop are do think today. XX there. where adjusted, omni-channel own are business they've their see that to when defining that, shops, They new of as markets the cookie will how are as both think

You're seeing right bit really opportunity exists a grew to collegiate markets. that's the urban of start maximize you in see now, starting shift a can they where the same so markets you can to that

how are in top to really that the able XX margins how of manageable potential, comfortable cookie the we seeing line and So a year, to base they're the shops, them. where then that of XXX, of shops expand out of very very cookie see with managing the both as that, they're do to to is the

that. our business XX% of how to which great pipeline, to line In that start you sight when will already to see fact, start of to develop have XX% they is

leverage sheet, exiting of three allocation Okay, then on And below just two the thank reference turns getting this that. guidance turns. you reflects long-term capital leverage for question getting year, balance

turns you down perhaps go as you the share you three path way? to try you glide or path talk looks explore to that about can can what like? start fast Do a turns just from So as along to two repurchases there on

a that access the we have When we XXXXX points get of today, confidence how the returns have, we opportunity from global growth. and we referenced XX,XXX that with much of have in moment it's a the compared to ago, Mike investing growth reminder real in

to in I our around mean, is two your over times and back, XX% to XX% EBITDA the those Our primary expect in grow times. we continue for returns the focus three point XXXX, To continue business. to run. of course the to investing we'll the reinvest getting future, long that

And we're debt so, will strong down business. signal that pay yes, free naturally our that because cash flow we

Securities. next question with Truist Bill Chappell Your comes from

question. proceed may your with You

Good Thanks. morning.

Good morning.

-- year your but on which and looking up to XX algorithm. is is want long-term pricing this this wanted you're growth, XX% slightly to follow just top-line I the simplistic, to outlets above for

least original I I in had But obviously, implying at think that from you're pricing. that the algorithm, pricing. mid-to-high-single-digits it's don't benefit think you much

to and it So assumption that is offsetting? to get lower-than-average in so a is elasticity would it is of this an do, of there Just volumes year? color only XX% that some that or that conservative what -- number. year growth seem it we're or on there's it best with tougher apply this comps very to any pricing volume how XX% just February are kind your some we're to it's being Is

Thanks. be great. So me just help that bridge would

thing. Sure

was for start XXXX that terms we saw our We've see expectation very contributing. changed. demand is to deliver in year say guidance a is algorithm, all that to start can a want long-term not Valentine's I thing able come there. We guidance. and Day first has and above the being optimistic that segments strong we the with nice The of in

nothing on that. changed So, has

as we with and Mike a Pricing premiumization, time have all a year, lot with a ourselves coming the focus. long-term sweet implied number And in and moment not the start pricing, the has talked the we as the go. drive business. our has such single-digits on year, of as is been we'll transactions the just right you're how will our we from out but range strategy, guidance XXXX, fresh, at above takes has puts We volumes in see grow and and the for about, which going algorithm treats always high been this in

of use inflation. cover We are also it course, to, that very pleased to

to We we to model. will as the adjust see have No fit. change accordingly

up? more of as pricing and you offset labor of other volume? Okay. assume year just to in or And a drive to Would your commodities have quiver the say, just make promotions, the you or things, to, attack continue things other I arrows get some progresses, understand it? you would to lot with better, maybe

unique. the the right really it Yeah. get that that Kreme. that's the I look we drives not packaging, approach, the from also Halloween, you was They're business. at right at where volume-driven approach maximizing actually look that again, our holiday merchant the volume-driven the premium, we The it's right drive volume-driven. line, see mentioned first Josh Valentine's you at really just can a And if And that step volume-driven. when that seasonal pretty we to story mean, it's it's again, Day. so was assortment, Krispy when

So and brand we that. can get and to elevate continue volume We price. our do

Okay, so thanks great, much.

Thank you, Bill.

you. Thank

Our comes Jared question Sachs. from Goldman with next Garber,

with may You proceed question. your

of the about would the Hi. Thanks brand I -- And more level gone as through this I for premiumization, premium with strategic down want doughnut of the balance maybe ghost morning. of, commentary Maybe opportunities? question product say, Obviously, detail do access kitchens. About, follow-up question all accessibility. guess, market the to on store opportunity. consider XX a maybe the How that points might with that fresh I and a we you fresh might period just higher products. the you've on think of convenience terms then in that some positioning thousand

Right.

rough grocer doors, & convenience you you XX,XXX to that you X%. getting put to aspect, still there, do So give have the even and -- snapshot the million -- spoke we we're its if out in to and Hub fresh from Spoke not model. XX,XXX X.X another close at look

story you're it's actually at doughnuts, piggyback I And our cabinets the look know the at we about merchandising, we display to look We just It's a [Indiscernible] a doing pretty also still along it's really the to is customer we about and channel etc. want that at on, to routes really we at. you significant which growth, that look today. that a comfortable hubs, Adding you of through and that, see. a also that going our going being the are the all get look the DFD to now. be scarce. What represent and the million number be again, fresh that which could but but whether about are access to of scarcity XX growth on that would the how the talk XX,XXX, is top shops, X.X the spokes you fresh. dark and one doors, is opportunity. maintaining continues from from big where make which product thing must potential at brand can -- right that And goes control We're the delivery, approaches space in unique quality. So want doughnuts drive awareness, disciplined sure you to look kitchens, are

That's Is would there is it, Great. you're be about you're some if doing And shop What's sure there's I'm up that maybe the that think Is talking -- about them -- lower definitely call clarity if ghost something thing really a Any additional like the commentary consumer would strategy shops. costs not that have look shops kitchens. versus that sure -- yeah, exactly the that I there, be that's the I'm same helpful. typically them just of you business? as dark e-com not helpful, how opening maybe understand but wanted helpful? can I to just benefit guess. it just access fresh where point? also drive would that we

is actually today, -- What where So the example. building products, marketplace what to the through the something our which which of right? not directly we're couldn't that one another doing right? of do at just delivering get another delivery and spoke, for kitchen is hubs, we do route, is in a ability Ghost somebody exists kitchen having kitchen along ghost dark shops that's we the just increases from they're opportunity else

but is -- low-cost doughnut that get because So it it's can doughnut a to then it wouldn't the investment, delivery and that, you business, then to then which the that shop maximize you're XX you that get a people you're shop just radius from delivery, getting cabinet you which another for drop to do. minutes delivery s sure you can primarily that think that and uses gives dark away a can as necessarily where where channel, want use make a is and now shop the can not fresh about e-commerce get gives our be you customer to the will dark what there a you from spoke, in basically is

a it's cabinet. it less dual fresh a can versus -- driver DFD even go only (ph) Schapple causes with Uber like it so a $X,XXX than or Yeah, DFD to the

be low-cost to the So why it's UK, in as we a U.S. we're [Indiscernible]. of access way now more in innovation it promising getting great started way. And the in looks that a that's really trailing doing

what including can and to this shop got this that hub customers dart and even system including portfolio. what do, That's has fresh. in is You deliver their the the expectation, spoke

That's that four frequency update that think a I at there and was definitely And the know through be one I end to FY the higher year the you landed? frequency just where term, the process, as said helpful. of from year you've getting would there mind. you on then of really any -- you. longer customer sort the through gone one X.X or you of more helpful. we if so over went times 'XX, commentary of so IPO Can on update about the just that IPO don't full about follow-up, times increasing us maybe now Thank

three. that But heavy at and that at can tends loyalty just XX% the customers frequency. business. versus still space. They're a loyalty to user our it's does of a amount about customers still we'll from increase a shop four, look We and Yes. more X.X, We're in that have probably be start at customer that again, our their who collect piece drive seasonal below to within we'll without people

the that and then start opportunity do thinking as treat around happen? it that and on does about you to drive If occasions you sweet then start capitalize a premiumization us seasonal how brand business, this way, the gifting big always will a that that How think is to of continue continue. about activity people

a we world as we more, think but start frequency. more to gifting our opportunities and and don't back as gets for people opportunity in, build that do just upside that bit the to an see celebrate I there's a

much. so thanks Great,

the Thank no to you. back there's would Mike if at for I call remarks. I Tattersfield further know questions time, over to this any turn further like don't now

environment get you, public are Yes. expectations exactly them very continue long-term they chats with. well. from year. hope thank our we the we're just And a throughout you we I some omni-channel year, today. last 'XX job -- this year FY I'm everybody They're which forward I, called is you just think of for Thank work out creamers, even the especially I did really a our Tremendous where Josh, not a sense as us. look creamers. incredible an us above and the can still for And in company handle day. of crispy a truly our all for company. to have -- as algorithm, all joining time every the first-year And model to spending for We're successful to crispy appreciative some type with

Thank you. This concludes participating. you today's conference for call. Thank

now may You disconnect.