Krispy Kreme Doughnuts Inc.
) touched a new 52-week high of $17.79 during the trading session
on May 31 and eventually closed at $17.32. The closing price of
this doughnut maker skyrocketed just after the release of its
financial results for the first quarter of fiscal 2014.
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The adjusted closing price of this restaurant company on May 31,
2013, represented a staggering one-year return of about 191.0%.
Average volume of shares traded over the last three months stands
at approximately 1,457K.
We believe, despite hitting its 52-week high, this Zacks Rank #2
(Buy) stock has plenty of upside left, given its raised fiscal
outlook and expected long-term earnings growth of 25%.
Impressive first-quarter 2014 results - including an earnings
surprise of 25.0%, sales surprise of 3.4%, a solid 42.9% jump in
adjusted earnings per share and 11.2% year over year increase in
revenues were the key growth drivers. In addition, management
revised the company's earnings outlook upward.
On May 30, Krispy Kreme reported first-quarter 2014 adjusted
earnings per share of 20 cents, beating the Zacks Consensus
Estimate by 4 cents and year-ago level by 6 cents. Earnings
benefited from margin expansion. Total revenues grew 11.2% on the
back of substantial increases at company-store, and domestic and
international franchise revenues. Higher traffic leading to 11.4%
same-store sales increase provided the company a shot in the arm.
The strong first-quarter results and management's increasing
faith in the company's prospects led it to raise fiscal 2014
earnings per share guidance from the range of 53-57 cents to the
range of 59-63 cents. This revised range implies a year-over-year
increase of around 26%-34%.
Moreover, Krispy Kreme has now delivered positive earnings
surprises in 3 of the last 4 quarters with an average beat of
Other Stocks to Consider
Others players in the same industry, which look attractive at the
current levels include
The AFC Enterprises Inc.
Brinker International Inc.
Burger King Worldwide Inc.
) all carrying a Zacks Rank #2 (Buy).