What Happened?

Shares of doughnut chain Krispy Kreme (NASDAQ: DNUT) jumped 3.8% in the afternoon session after the broader market rallied as a key inflation report came in cooler than expected, boosting investor sentiment, particularly for consumer-focused stocks. 

The U.S. Labor Department reported that the Consumer Price Index (CPI) rose 2.7% year-over-year in November, which was below the 3.1% that economists had forecast. This news suggested that inflation was easing faster than anticipated. As a result, stocks in the consumer discretionary sector, which includes companies like Krispy Kreme, performed strongly. The sector was the best-performer of the day, rising more than 2%. Investors appeared to bet that lower inflation would lead to more disposable income for consumers, potentially increasing spending on non-essential goods and services.

After the initial pop the shares cooled down to $4.62, up 3.5% from previous close.

Is now the time to buy Krispy Kreme? Access our full analysis report here.

What Is The Market Telling Us

Krispy Kreme’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 10 months ago when the stock dropped 26.1% on the news that the company reported disappointing Q4 2024 results as it missed across all key metrics, including sales, operating profits, and earnings. 

Revenue fell 10.4% year on year, reflecting a decline in U.S. sales due to the Insomnia Cookies divestiture and the impact of a cybersecurity incident that cost an estimated $11 million in lost revenue. Looking ahead, Krispy Kreme's full-year revenue, EPS, and EBITDA guidance all fell short of Wall Street's expectations. Overall, this was a softer quarter, with weaker performance and cautious guidance weighing on investor sentiment.

Krispy Kreme is down 52.6% since the beginning of the year, and at $4.62 per share, it is trading 53.5% below its 52-week high of $9.93 from December 2024. Investors who bought $1,000 worth of Krispy Kreme’s shares at the IPO in June 2021 would now be looking at an investment worth $219.76.

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