Once known solely for its donuts, Krispy Kreme has moved beyond its former concentration. By introducing healthier items such as yogurt, the company has tried to broaden its appeal and pull in customers looking for more than just a sugar high. That’s been an essential and smart strategy, with competition from rival Dunkin Brands Group Inc (NASDAQ:DNKN) becoming fierce as Dunkin’ has sought to expand its presence in the doughnut-and-coffee space.
One factor that has helped Krispy Kreme is the trend toward consolidation in the coffee and sweets industry. Starbucks Corporation (NASDAQ:SBUX) recently bought Teavana and Tully’s, while private-equity firms have taken out their share of coffee purveyors as well. Krispy Kreme Doughnuts (NYSE:KKD)may not be known for coffee, but its Signature coffee line has helped build coffee loyalty with its customer base, and so the company may look good to a potential acquirer. Yet Krispy Kreme took steps in January to dissuade acquirers by adopting a poison pill, effectively preventing a buyer from taking advantage of its carried-forward net operating losses, which are one of its most valuable assets.
In its quarterly report, watch for Krispy Kreme to discuss its recent expansion move in Taiwan. If the company can boost its international growth, then the stock could enjoy another leg up and regain more of its past glory from its boom years.
The article Krispy Kreme Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.
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