Is Krispy Kreme a Buy After Its Latest Earnings Report?

Krispy Kreme reported adjusted Q3 EPS of $0.06, up from $0.01 a year earlier, while revenue fell 12.5% to nearly $329 million, largely due to refranchising. Negative free cash flow improved to nearly $10 million from $92 million, net leverage declined from 6.7x to 5.5x, and full-year revenue guidance rose to $1.35 billion–$1.4 billion as capex guidance fell to $40 million–$45 million. The turnaround progress and raised outlook prompted a positive earnings reaction, but high leverage and uncertainty around changing consumer preferences, including GLP-1 drugs, remain risks.