Krispy Kreme Doughnuts, Inc. - Momentum

Krispy Kreme Doughnuts, Inc. (KKD) just jumped into a new multi-year high after reporting an impressive 44% earnings surprise. Estimates have since moved higher as well, providing more momentum for this Zacks #1 rank stock.

Company Description

Krispy Kreme Doughnuts, Inc. operates as a retailer of doughnuts, beverages and various treats. The company was founded in $537 million.

KKD had been trading weak for most of the year before perking up over the last month and surging into a new high on strong Q1 results.

First-Quarter Results

Revenue for the period was up 14% from last year to $105 million. Earnings also came in strong at 13 cents, 44% ahead of the Zacks Consensus Estimate.

The good quarter was driven by a strong showing in same-store sales, a key retail metric, up 5.8% form last year for the tenth consecutive quarterly increase.

The company also continues to pursuit international opportunities, with international franchise revenue up 18% from last year to $5.6 million.

Financial Profile

In spite of the company’s bumpy ride over the last few years, it still has a strong balance sheet, with cash and short-term investments of $25 million and $54 million in total debt.

Estimates

We saw some decent movement in estimates off the good quarter, with the current year adding 15% to 31 cents. The next-year estimate is pegged at 39 cents, a 28% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks good, with a PEG Ratio of 1, in line with the benchmark for value.

1-Month Chart

On the chart, shares began reversing the recent downtrend last month, jumping into a new multi-year high on the good quarter. Take a look below.