Krispy Kreme Reports Q1 2026 Turnaround Progress with Revenue Decline, EBITDA Growth

Event summary

  • Krispy Kreme reported Q1 2026 revenue of $367.0 million, a 2.2% decline year-over-year due to strategic store closures.
  • Adjusted EBITDA increased 38.0% to $33.1 million, with margins expanding by 260 basis points.
  • The company completed refranchising deals in Japan and the Western U.S., generating $163 million in cash proceeds.
  • Systemwide sales grew 0.7% in constant currency, excluding the ended McDonald’s USA partnership.
  • Krispy Kreme opened 26 new shops, nearly all franchised, and plans to open at least 100 shops in 2026.

The big picture

Krispy Kreme's Q1 2026 results reflect its ongoing turnaround efforts, with a focus on refranchising, cost reduction, and margin expansion. The company is pivoting towards a more asset-light model, aiming to generate nearly 50% of systemwide sales from franchisees by fiscal 2027. This shift aligns with broader industry trends towards franchising as a means to reduce capital intensity and improve financial flexibility. The success of this strategy will depend on Krispy Kreme's ability to maintain brand strength and operational efficiency while navigating the challenges of a competitive consumer goods market.

What we're watching

Franchise Model Shift
Whether Krispy Kreme can sustain profitable growth through its capital-light international franchise model.
U.S. Market Recovery
How the company's focus on higher-volume doors with strategic partners will impact U.S. revenue per door.
Debt Reduction Progress
The pace at which Krispy Kreme can reduce its net leverage ratio below 5.5x through refranchising and operational improvements.