Krispy Kreme Expands – Analyst Blog

Krispy Kreme Doughnut Inc. (KKD) enters in Thailand by opening its first franchise owned store and plans to open 20 more stores in the country by 2015. 

 

The company’s subsidiary Krispy Kreme Doughnut Corporation through its franchisee KDN Company Limited has opened the store. The franchisee is mostly owned and controlled by Ms. Ausanee Mahagitsiri, who with her family owns and operates one of Thailand’s largest conglomerates PM Group. 

 

The company, based in Winston-Salem, North California, said that the first Thailand store is opened in the Siam Paragon shopping center, which is located at the center of the Bangkok business district. The location is quite attractive as Bangkok is not only the largest city of Thailand but also its capital.

 

We believe that this opening is the first step by Krispy Kreme to make its products available in Thailand. The new shop will not only increase the market share of the company but will also give the company a strong foothold in Thailand. Moreover, this new store opening also marks a definite step toward increasing its international location.

 

Including the United States, the company earlier had 20 locations and now Thailand is its 21st location.

 

In August 2010, Krispy Kreme through its franchisee, Dominspec, S.A. also opened its first shop in the Dominican Republic. The franchisee plans to open 14 stores in the country by next five years.   

 

Krispy Kreme’s primary competitors are Biglari Holdings Inc. (BH), Starbucks Corp. (SBUX) and Einstein Noah Restaurant Group Inc. (BAGL).

 

Krispy Kreme currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. We are also maintaining our long-term Outperform recommendation on the stock.