Krispy Kreme narrowed its loss in the first quarter of fiscal 2026, moving closer to profitability as its four-pillar turnaround plan gains traction. The company posted a loss of $22.67 million for the quarter ended March 29, down from a loss of $33.41 million in the same quarter a year prior. Adjusted net loss fell to $7.78 million from $8.84 million.
Consolidated adjusted EBITDA climbed to $33.1 million from $23.98 million year-over-year, even as net revenues declined 2.2% to $367.03 million from $375.18 million. CEO Josh Charlesworth credited the improved bottom line to what he called "significant progress across every pillar of our turnaround plan."
Refranchising and capital efficiency
The first pillar centers on refranchising, a model that transfers store ownership to franchisees while Krispy Kreme collects royalties and maintains a lighter capital footprint. Charlesworth pointed to a refranchising agreement with Unison Capital and a reduction of ownership in its Western US joint venture with WKS Restaurant Group, both completed in March. These moves enable "more profitable system-wide sales growth while accelerating new shop development through a capital-light model," he said.
Cost cuts through operations
The company is also pursuing margin expansion by simplifying its business, with the biggest gains so far in the US segment. Charlesworth described improvements in production planning, labor optimization, and streamlined hub operations. Delivery has become more efficient through route management, demand planning, and optimized production and delivery schedules. In April, ahead of schedule, Krispy Kreme completed a transition of its US fresh delivery network to third-party logistics partners. Charlesworth noted that the company now has "greater cost predictability and reduced operational risk" and expects logistics benefits to offset recent fuel price increases.
Door expansion with retail partners
On the growth pillar, Krispy Kreme added more than 250 high-volume, higher-margin doors during the quarter through partnerships with Publix, Sam's Club, and Target, building on 200 doors added in the fourth quarter of fiscal 2025. This channel expansion allows the company to grow sales without building new company-owned stores.
Capital allocation
Krispy Kreme spent $8.8 million on capital expenditures in the first quarter, primarily in the US for infrastructure repairs and maintenance. The company has shifted its investment focus, moving away from building new hubs and instead leveraging existing excess capacity for growth.