DNUT 10-K & 10-Q changes, risk factors and insider trading

Investing in our securities involves a variety of risks and uncertaintiesuncertainties, including those discussed below. IfThese anydisclosures ofreflect the followingCompany’s beliefs and opinions as to risks or uncertainties materialize,that could have a material adverse effect on the Company, our business, financial condition, prospects, results of operations, cash flows, and stock price could be materially and adversely affected.price. The risks discussed below are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition, prospects, results of operations, cash flows, or stock price. References to past events are examples only and are not intended to be a complete listing or to indicate the likelihood of similar events occurring in the future.

•Changes in consumer preferences and demographic trends, including in response to unfavorable economic conditions,trends could negatively impact our business.

•Any material failure, inadequacy, or interruption of theour information technology that we use in our operations has and may in the future adversely affect our ability to effectively operate our business and result in financial or other loss.

•If we, our franchisees, or our third-party service providers are unablefail to protect regulated, protected,protect, or personallyto identifiablecomply information,with laws and regulations governing our data, we or theyour franchisees could be exposed to data loss, litigation, regulatory fines, and other liability,liabilities whichthat could harm our reputation and have a material adverse effect on us.our business, financial condition, and results of operations.

•We have identified a material weakness in our internal control over financial reporting. If our remediation of the previously identified material weakness is not effective, or if we fail to develop and maintain an effective system of internal controls, our ability to produce timely and accurate financial statements may be impaired, investors may lose confidence in our financial reporting, and the price of our common stock may decline.

•We may not realize the anticipated benefits from past or potential future acquisitions, divestitures,divestitures (including refranchising), investments, or other strategic transactions.

•Our DFDfresh delivery business channels depend on key customers and are subject to risks if such key customers reduce their purchases or terminate their relationships with us.

•Our reputation and brand image are essential to our business success.success and a failure to protect our brand image could have a material adverse effect on our business, results of operations or financial condition.

•We have incurredOur significant indebtedness, whichindebtedness could adversely affect us.

•A key portion of our growth strategy depends on opening new and maintaining existing Krispy Kreme shops and Points of Access both domestically and internationally.

•We face risks as we continue to focus on profitable expansion of our omni-channelfresh businessdelivery model.and digital channels.

•Political, economic, currency, and other risks associated with our international operations could adverselyhave affecta material adverse effect on our and our international franchisees’ operating results.

•We are the exclusive or primary supplier of doughnut mixes and other key ingredients to shops worldwide and any problems supplying these ingredients could negatively affect our and our franchisees’ ability to make doughnuts.

•Our reliance on a single vendor for nearly all distribution of materials and supplies in the U.S. and Canada poses risks to our and our franchisees’ ability to make doughnuts if the vendor fails to provide these materials and supplies in accordance with our agreement.doughnuts.

•Our profitability is sensitive to changes in the cost of raw materials and other commodities and we may not be able to increase prices to fully offset inflationary pressures on costs, which may adversely affect us.our financial condition or results of operations.

•Changes in the availability or cost of labor could adversely affect us.our business, financial condition, and results of operations.

Risks Related to Regulation, Litigation and Our Intellectual Property

•Our business may be adversely affected by litigation, regulation and publicity concerning food or occupational safety, quality, health, and other issues, which could negatively affect public policy and consumer preferences toward our products.

•We are subject to franchise laws and regulations that govern our status as a franchisor and regulate some aspects of our franchise relationships. Our ability to develop new franchised shops and to enforce contractual rights against franchisees may be adversely affected by these laws and regulations governing our status as a franchisor,regulations, which could cause our franchise revenues to decline.

•Healthcare legislation and other potential employment legislation could adversely affect our business, financial condition, and results of operations.

•We may be affected by matters related to environmental, social, and governance (“Responsibility”) trends and events, including governmental regulation and supply chain disruptions, that may adversely affect us.our business and reputation.

•Adverse weather conditions, natural disasters, war or terrorist attacks, pandemics, or other catastrophic events could adverselyhave affecta material adverse effect on our business.

•Certain provisions of Delaware Law, our certificategoverning of incorporation, and our bylawsdocuments, and the Investors’ownership Rightsof Agreementapproximately with43% of our common stock by JAB Holdings(defined B.V. ("JAB"below) could hinder, delay,delay or prevent a change in controlcontrol, which could adversely affect the price of us.our common stock.

•If the ownership of our common stock continues to be highly concentrated, it may preventlimit shareholdersstockholders other than JAB from influencing significant corporate decisions and may result in conflicts of interest.

•The market price of our common stock could be negatively affected by salesSales of substantial amounts of our common stock incould negatively affect the publicprice markets.of our common stock.

Moreover, our dependencydependence on third-party delivery services and third-party Points of Access heightens the risk of these food safety issues. While we oversee some of these third parties’ operations, the quality and service they provide could be compromised by various factors, including factors that are beyond our control or are unforeseeable, making it challenging to identify contamination or other defects. The risk is even higher with partners we do not monitor or monitor less rigorously.

Additionally, food safety concerns may expose us to legal actions, regulatory investigations, product recalls, and financial consequences, including penalties. Any association of our brand, our franchisees, or the broader food service industry with food safety issues could harm our reputation, leading to a decline in revenue and profitability.profitability and could have a material adverse effect on our business, financial condition, and results of operations.

The food service industry is highly susceptible to shifts in consumer preferences, including dietary choices and health concerns, as well as broader factors like economic conditions, spending habits, demographic changes, traffic trends, and competition from other brands. In addition, our products fall into the category of indulgences, making them particularly sensitive to shifts in discretionary spending patterns.patterns and dietary trends (including use of weight loss medication). Shifts in consumer behavior based on any of these factors may lead to reduced sales. In the event of unfavorable economic conditions where we andor our franchisees operate, our consumers may have reduced disposable income, leading to potential reductions in their consumption of our products. Any such reductions could have a material adverse effect on our business, financial condition, and results of operations.

Our business and that of our franchisees significantly depend on computer systems and information technology. Among other things, the effectiveness of our business management is closely tied to the reliability and capacity of these systems, and our omni-channel strategy, particularly our delivery model,strategy relies heavily on robust information technology systems. As we diversify and grow our business channels, our susceptibility to related risks intensifies.

We also have experienced business disruptions due to failures in critical information technology platforms and continue to face potential business disruptions due to such failures, including those hosted or provided by third parties. These disruptions can stem from hardware and software issues; cyber-attacks, such as those involving computer viruses, ransomware, other malware, distributed denial-of-service attacks, and nation-state sponsored malicious cyber activity; natural disasters, such as earthquakes, hurricanes, floods, and fires; power outages; telecommunications failures; human errors; criminal activities; and intentional vandalism. For example, during the fourth quarter of fiscal 2024, unauthorized activity on a portion of our information technology systems resulted in the Company experiencing certain operational disruptions, including with online ordering in parts of the U.S., which materially affected the Company’s business operations and results of operations. For further information regarding the 2024 Cybersecurity Incident (defined below), see “Cybersecurity” in Item 1C of Part I of this Annual Report on Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Item 7 of Part II of this Annual Report on Form 10-K.Report.

Our and our franchisees’ information systems and records are at risk of cyber-attacks and security incidents. We periodicallyregularly experience directed attacks intended to lead to interruptions and delays in operations as well as loss, misuse or theft of personal information and other data, confidential information, or intellectual property. Such attacks or security incidents have occurred and could occur as a result of hacking attempts, software or system failures, viruses, operator errors, and accidental data leaks. Cyber-attacks are increasingly sophisticated and varied, often involving phishing, social engineering, service disruption attacks, malware, or ransomware, and they may not be detected until they have been active for some time. Further, these types of threats may be exacerbated by recent developments in artificial intelligence and its increased use to produce sophisticated malware, ransomware, phishing schemes, and other fraudulent activities. Additionally, internal threats exist from employees, franchisees, contractors, or third parties who might bypass security measures to access or leak sensitive, regulated, or personally identifiable information, either maliciously or inadvertently. We have in the past experienced cybersecurity incidents.incidents, Forsuch example,as the 2024 Cybersecurity IncidentIncident, which materially affected the Company’s business operations and results of operations. For furthermore information regarding the 2024 Cybersecurity Incident, see “Cybersecurity” in Item 1C of Part I of this Annual Report on Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Item 7 of Part II of this Annual Report on Form 10-K.Report.

The security measures and controls implemented by us or our third-party providers are not foolproof against such incidents and may be inadequate to prevent a cyber-attack or security breach. AAny breachinterruption, orsuch perceivedas breachthose caused by a breach, in our or our third-party providers’ information technology systems could severely interrupt our operations, negatively affect our business, financial standing, and operational results, and harm our reputation and brand credibility among consumers and business partners. As a result of the 2024 Cybersecurity Incident, the Company experienced certain operational disruptions that resulted in lost sales and increased expenses related to remediation.

Our cybersecurity insurance may not fully cover the consequences of the 2024 Cybersecurity Incident or potential future security breaches or cybersecurity incidents, and future coverage may not be available at reasonable costs or at all. Insurers might also deny claims for the 2024 Cybersecurity Incident or othercybersecurity incidents. Addressing a security breach requires substantial financial and operational resources, including remediation of security vulnerabilities, legal defense, and compliance with notification obligations. Such efforts divert management attention and resources away from our business activities, adversely affecting our business operations, financial condition, and results. Additionally, our efforts to remedy these issues may not be successful, and we might face challenges in implementing, maintaining, and upgrading effective safeguards.

If we, our franchisees, or our third-party service providers are unablefail to protectprotect, or to comply with laws and regulations governing, our consumer and employee data and other regulated, protected, or personally identifiable information, we or our franchisees could be exposed to data loss, litigation, regulatory fines, and other liability,liabilities whichthat could harm our reputation and have a material adverse effect on our business, financial conditioncondition, and results of operations.

OurWe operationscollect, necessitate collecting, transmitting,transmit, and storingstore large amounts of consumerdata regarding our consumers and employee data,employees, including sensitive information like credit and debit card numbers and other personally identifiable details. This data is housed in our own and our franchisees’ information technology systems, as well as those of third-party service providers. Non-complianceA withfailure legalto requirementsprotect our systems, or industrythose standardsprovided by our third-party service providers and franchisees, from damage, disruption, fraud or cyber-attacks, could severely damageharm our brand or reputation, result in significant fines or penalties, and have a material adverse effect on our business, financial condition, or results of operations. Additionally, our reliance on independent service providers for payment processing poses risks if these providers are unable or unwilling to offer services or if their costs escalate.

Internationally, we are subject to regulations like the European Union’s General Data Protection Regulation (“GDPR”) and the U.K.’s GDPR and Data Protection Act of 2018. These laws impose strict requirements on data handling, including consent, individual rights, cross-border data transfer, breach notifications, and data security and confidentiality. Non-compliance with these international regulations could result in significant penalties and legal liabilities for us andor our franchisees. Adapting our and our franchisees’ systems to these evolving requirements may require substantial investment and time.

We have identified a material weakness in our internal control over financial reporting.reporting in fiscal 2025. If our remediation of the material weakness is not effective, or if we fail to develop and maintain an effective system of internal controls, our ability to produce timely and accurate financial statements may be impaired, investors may lose confidence in our financial reporting, and the price of our common stock may decline.

We have identified a material weakness in our internal control over financial reporting.reporting Wein arethe evaluatingsecond stepsquarter toof remediatefiscal 2025. While we believe we have remediated the material weakness.weakness Theseidentified remediationduring measuresfiscal may2025 beas timeof consumingDecember and28, costly, and2025, there is no assurance that theseour remedial measures will ultimately have thebeen intended effectseffective or that additional material weaknesses will not be identified. InWe addition,have evenhad if we are successfulerrors in strengthening our controlsfinancial and procedures,statements in the futurepast thosethat have required the revision of our financial statements. In the future, controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements. For additional information related to thepreviously identified material weaknessweaknesses in internal control over financial reporting identified and the related remedial measures, see Item 9A, “Controls and Procedures,” of Part II of this Annual ReportReport. onThere Formis 10-K.no assurance that additional material weaknesses will not be identified. In addition, in the future, controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

Any failuredeficiency toin remediate the identified material weakness, or develop or maintain effectiveour internal control over financial reporting and disclosure controls,controls and procedures, or any difficulties encountered in their implementation or improvement, could result in a restatement of our consolidated financial statements for prior periods, cause us to fail to meet our financial and other reporting obligations, result in an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, or lead to investigations or sanctions by regulatory authorities or other potential claims or litigation. Any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations, and could cause our investors to lose confidence in the accuracy and completeness of our financial reports and the price of our common stock to decline.

We may not realize the anticipated benefits from past or potential future acquisitions, divestitures,divestitures (including refranchising), investments, or other strategic transactions.

We periodically assess and may engage in mergers, acquisitions, full or partial divestitures,divestitures (including refranchising), joint ventures, strategic partnerships, minority investments, or other strategic initiatives to execute on our growth strategy. We make these decisions based on individual circumstances. The success of these endeavors is dependent upon many factors, such as the availability of sellers and buyers, the availability of financing, the ability to negotiate transactions on terms deemed acceptable and the ability to successfully transition and integrate shop operations.

SuchIn addition, such strategic endeavors come with inherent risks, including but not limited to:

The following discussion and analysis of our financial condition and results of operations should be read together with our audited Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K.Report. This section of the Annual Report on Form 10-K generally discusses fiscal 2025 and fiscal 2024 items and year-to-year comparisons of fiscal 2025 to fiscal 2024. Discussions of fiscal 2023 items and year-to-year comparisons of fiscal 2024 to fiscal 2023. Discussions of fiscal 2022 items and year-to-year comparisons of fiscal 2023 and fiscal 2022 are not included in this Annual Report on Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31,29, 2023.2024. This discussion contains forward-looking statements that involve risks and uncertainties. For more information, see the section of this Annual Report titled “Cautionary Note Regarding Forward-Looking StatementsStatements.” included in Part 1 of this Annual Report on Form 10-K.

We operate and report financial information on a 52 or 53-week fiscal year ending on the Sunday closest to December 31. Fiscal year2025 reflects our results of operations for the 52-week period ended December 28, 2025. Fiscal 2024 reflects our results of operations for the 52-week period ended December 29, 2024. Fiscal year 2023 reflects our results of operations for the 52-week period ended December 31, 2023.

•U.S.: Includes all Krispy Kreme Company-owned operations in the U.S., and Insomnia Cookies Bakeries globally through the date of deconsolidation (refer to Note 2,3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K for more information);

•International: Includes all Krispy Kreme Company-owned operations in the U.K., Ireland, Australia, New Zealand, Mexico, and Canada, andas well as Japan for all periods covered by this Annual Report; and

(1)We generated 5.0% organicOrganic revenue growthdecline was (1.3)% in fiscal 2024.2025. Refer to “Results of Operations” below for more information on and the calculation of organic revenue growth.

(23)Refer to “Key Performance Indicators and Non-GAAP Measures” below for more information as to how we define and calculate Adjusted EBITDA, Adjusted EBIT, and Adjusted Net (Loss)/Income, Diluted and for a reconciliation of Adjusted EBITDA, Adjusted EBIT, and Adjusted Net (Loss)/Income, Diluted to net loss,(loss)/income, the most comparable measure calculated under accounting principles generally accepted in the U.S. (“GAAP”).

We continue to prioritize expanding our digital channel sales.sales, which grew in fiscal 2025 compared to fiscal 2024. Growth in our digital channel is due to improvements in our branded digital platform as well as increasing product availability through third party digital channels, including delivery apps and our customers’ digital platforms. Innovation is also a significant driver of frequency as we create and introduce premiumpromotions and buzz-worthyproducts offeringsthat attract media outlets to consumersour brand across our Global Points of Access. Additionally, we deliver new product experiences that align with seasonal and trending consumer and societal interests and create positive connections through simple, frequent, brand-focused offerings that encourage shared experiences. During the fourth quarter of fiscal 20242025 we delivered the joy that is Krispy Kreme through powerful specialty doughnuts and seasonal activations including Halloween, Thanksgiving,Fall, and Christmas among many others around the world.

Throughout this Annual Report on Form 10-K,Report, we utilize “Global Points of Access” as a key performance indicator. Global Points of Access reflect all locations at which fresh doughnuts can be purchased. We define Global Points of Access to include all Hot Light Theater Shops, Fresh Shops, Carts and Food Trucks, DFDfresh Doors,delivery doors, Cookie Bakeries (through the date of the Insomnia Cookies divestituredeconsolidation in fiscal 2024), and other points at which fresh doughnuts can be purchased, at both Company-owned and franchise locations as of the end of the respective reporting period. We monitor Global Points of Access as a metric that informs the growth of our omni-channel presence over time and believe this metric is useful to investors to understand our footprint in each of our segments and by asset type.

(1)Reflects the divestituredeconsolidation of Insomnia Cookies during fiscal 2024.

We also utilize “Hubs” as a key performance indicator. OurWe transformation is driven by the implementation ofhave an omni-channel strategy to reach more consumers where they are and drive revenuesustainable, profitable growth, and this strategy is supported by a capital-efficient Hub and Spoke distribution model that provides a route to market and powers profitability. Our Hot Light Theater Shops and Doughnut Factories serve as centralized production facilities (“Hubs”). From these Hubs, we deliver doughnuts to our Fresh Shops, Carts and Food Trucks, and DFDfresh Doorsdelivery doors (“Spokes”) primarily through an integrated network of Company-operated delivery routes, designed to ensure quality and freshness. GoingThroughout forward,fiscal 2025, we continued to outsource some of our U.S. deliveries to 3PL carriers, and expect to outsourcecomplete thesethe U.S. DFD deliveriestransition to one or more 3PL carriers,carriers anduring approachfiscal we have used in several international markets.2026. Specific to the U.S. segment, certain legacy Hubs have not historically had Spokes. Many Hubs in the U.S. segment are being converted to add Spokes while certain legacy Hubs do not currently have the ability or need to add Spokes.

Non-GAAP and Operating Measures

We report our financial results in accordance with GAAP; however, management evaluates our results of operations using, among other measures, organic revenue (decline)/growth, Sales per Hub, Systemwide Sales, adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBIT, Adjusted Net (Loss)/Income, Diluted, and Adjusted EPS as we believe these non-GAAP and operating measures are useful in evaluating our operating performance. Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying business, and they are consistent with how business performance is planned, reported and assessed internally by management and the Company’s Board of Directors.

Non-GAAP financial measures are not standardized and it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP or a substitute for results reported under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, we urge you to review our non-GAAP financial measures in conjunction with our historical audited Consolidated Financial Statements and notes thereto included in this Annual Report on Form 10-K and not to rely on any single financial measure.

Organic Revenue (Decline)/Growth

Organic revenue (decline)/growth measures our revenue growth trends excluding the impact of acquisitions, divestitures, and foreign currency, and we believe it is useful for investors to understand the expansion of our global footprint through internal efforts. We define “organic revenue (decline)/growth” as the (decline)/growth in revenues, excluding (i) the impact of revenues of acquired shops owned by us for less than 12 months following their acquisition, (ii) the impact of foreign currency exchange rate changes, (iii) the impact of shop closures related to restructuring programs such as the shop portfolio optimization program initiated for Krispy Kreme U.S. during fiscal 2022,programs, (iv) the impact of the Brandeddivestiture Sweatof Treatsa businesscontrolling exit,interest in Insomnia Cookies, (v) the impact of the divestiture of Insomniashops Cookies,through refranchising, and (vi) the impact of revenues generated during the 53rd week for those fiscal years that have a 53rd week based on our fiscal calendar defined in the “Overview” section. See “Results of Operations” for our organic (decline)/growth calculations for the periods presented.

Adjusted EBITDA, Adjusted EBIT, Adjusted Net (Loss)/Income, Diluted, and Adjusted EPS

We define “Adjusted EBITDA” as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, and certain other non-recurring, infrequent or non-core income and expense items. Adjusted EBITDAEBITDA, both on a consolidated and at the segment level, is a principal metric that management uses to monitor and evaluate operating performance and provides a consistent benchmark for comparison across reporting periods. “Adjusted EBITDA margin” reflects Adjusted EBITDA as a percentage of net revenues.

We define “Adjusted EBIT” as earnings before interest expense, net and income tax expense, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, and certain other non-recurring, infrequent or non-core income and expense items. Adjusted EBIT is a principalmetric metriccomplementary to Adjusted EBITDA that takes into account depreciation expense and amortization of right of use assets, allowing management uses to monitorhave a view of performance when including amortized costs from capital investments and evaluatelease operating performance and provides a consistent benchmark for comparison across reporting periods.obligations.

We define “Adjusted Net (Loss)/Income, Diluted” as net income/(loss)/income attributable to common shareholders, adjusted for interest expense, share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, the tax impact of adjustments, and certain other non-recurring, infrequent or non-core income and expense items. “Adjusted EPS” is Adjusted Net (Loss)/Income, Diluted converted to a per share amount.

Adjusted EBITDA, Adjusted EBIT, Adjusted Net (Loss)/Income, Diluted, and Adjusted EPS have certain limitations, including adjustments for income and expense items that are required by GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses that are the same as or similar to some of the adjustments in this presentation, such as share-based compensation. Our presentation of these non-GAAP measures should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using these non-GAAP measures supplementally.

The following tables present a reconciliation of net income/(loss)/income to Adjusted EBIT and Adjusted EBITDA, and net income/(loss)/income to Adjusted Net (Loss)/Income, Diluted and Adjusted EPS for the fiscal years presented:

(1)Primarily foreign translation gains and losses in each period.period, Fiscalas 2024well also consists ofas equity method income from Insomnia Cookies following the divestiture discussedof a controlling interest during fiscal 2024 until the sale of our remaining interest in the second quarter of fiscal 2025. Refer to Note 2,3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements includedfor inmore Item 8 of Part II of this Annual Report on Form 10-K.information.

(2)Fiscal 2025 consists primarily of $33.6 million in costs associated with the U.S. national expansion (including McDonald’s USA), including exit costs associated with the termination of the Business Relationship Agreement with McDonald’s USA, and $2.8 million in costs for the evaluation of potential opportunities to refranchise certain equity markets. Fiscal 2024 consists primarily of $8.2 million in costs associated with the divestiture of the Insomnia Cookies business, $7.3 million in costs preparing for the U.S. national expansion (including McDonald’s U.S. expansion,USA), and $4.0 million in costs associated with global transformation. Fiscal 2023 consists primarily of costs associated with global transformation of $5.9 million and U.S. initiatives such as the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs. Fiscal 2022 consists mainlycosts of equipment$17.8 disposals, equipment relocation and installation, consulting and advisory fees, and other costs associated with the shift of Branded Sweet Treats manufacturing capability from Burlington, Iowa to Winston-Salem, North Carolina.million.

(6)Fiscal 2025 consists primarily of costs associated with restructuring of the U.S. and U.K. businesses. Fiscal 2024 consists primarily of costs associated with the restructuring of the U.S. and U.K. executive teams. Fiscal 2023 and 2022 consistconsists primarily of costs associated with restructuring of the global executive team.

(7)Consists of a gain related to the remeasurement of the equity method investments in KremeWorks USA, LLC and KremeWorks Canada, L.P. to fair value immediately prior to the acquisition of the shops. Refer to Note 2,3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K for more information.

(89)Fiscal 2025 and fiscal 2024 consistsconsist primarily of $3.1$7.4 million inand costs$3.1 million, respectively, related to remediation of the 2024 Cybersecurity Incident, including fees for cybersecurity experts and other advisors.advisors, net of $2.4 million of insurance proceeds received in fiscal 2025 relating to these costs. Fiscal 2023 and fiscal 2022 consistconsists primarily of legal and other regulatory expenses incurred outside the ordinary course of business on matters described in Note 15, Commitments and Contingencies, to the audited Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K.business.

(1112)Tax impact of adjustments calculated by applying the applicable statutory rates. The Company’s adjusted effective tax rate is 17.9%, 34.0%, 27.2%, and 24.1%27.2%, for each of thefiscal 2025, fiscal years 2024, 2023, and 2022,fiscal 2023, respectively. Fiscal 20242025 and fiscal 20232024 also include the impact of disallowed executive compensation expense. Fiscal 2022 includes the impact of disallowed executive compensation expense and a discrete tax benefit related to a legal accrual.

(1213)Fiscal 2025 consists of the recording of valuation allowances of $4.9 million associated with tax attributes primarily attributable to incremental costs removed from the calculation of Adjusted Net (Loss)/Income, a discrete tax benefit unrelated to ongoing operations of $1.0 million, and the effect of various tax law changes on existing temporary differences of $0.2 million. Fiscal 2024 consists of the recognition of previously unrecognized tax benefits unrelated to ongoing operations,operations of $0.3 million, a discrete tax benefit unrelated to ongoing operations,operations of $0.5 million, the release of valuation allowances associated with the divestiture of Insomnia Cookies,Cookies of $2.9 million, and the effect of various tax law changes on existing temporary differences.differences of $0.3 million. Fiscal 2023 consists of the recognition of a previously unrecognized tax benefit unrelated to ongoing operations,operations of $2.3 million, the effect of tax law changes on existing temporary differences,differences $0.1 million, and a discrete tax benefit unrelated to ongoing operations. Fiscal 2022 consistsoperations of the$1.0 recognition of previously unrecognized tax benefits unrelated to ongoing operations, as well as benefits attributable to multiple tax years due to lapse of the statute of limitations. Fiscal 2022 also includes the effect of discrete adjustments to the Company’s deferred tax liabilities that are unrelated to the Company’s ongoing operations.million.

We believe Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Krispy Kreme operates in more than 40 countries through its unique network of shops (“Doughnut Shops”), partnerships with leading retailers, and growing digital business. Our purpose is to touch and enhance lives through the joy that is Krispy Kreme. We are an omni-channel business that focuses on fresh, high-quality doughnuts with 15,12515,665 points of access globally as of the end of the firstsecond quarter of fiscal 2026. We refer to the points of access where consumers can purchase our doughnuts as our “Global Points of Access” or, when referring to points of access in a particular region or segment, “Points of Access.” We sell doughnuts to consumers through three main channels: (1) Hot Light Theater Shops and Fresh Shops, (2) fresh delivery, and (3) digital.

(1)Organic revenue decline was 2.6%0.3% and 1.5%, respectively, in the quarter and two quarters ended MarchJune 29,28, 2026. Refer to “Results of Operations” below for more information on and the calculation of organic revenue growth/(decline).

Our Turnaround Plan

•Refranchising: Improve financial flexibility through pursuit of opportunities to refranchise certain international equity markets. In the first quartertwo quarters of fiscal 2026, we restructured our consolidated subsidiary in the western U.S., W.K.S. Krispy Kreme, to a minority ownership interest and completed the previouslysale announced transaction to sellof our operations in Japan;Japan. We continue to evaluate additional refranchising opportunities and remain focused on identifying the right partners both in international markets and the U.S. to maximize value and position the Company for long-term growth.

•Improving return on invested capital: Reduce capital intensity by using existing assets and focusing on franchise development. During the first quartertwo quarters of fiscal 2026 capital expenditures decreased by $17$38 million when compared to the first quartertwo quarters of 2025, and we expect to continue to reduce capital investment in fiscal 2026 compared to fiscal 2025. We are also making selective, capital-light investments in geographies which currently have limited access to our products or where we have insufficient production to meet demand. This includes openingexpansion ininto new international franchise marketsmarkets. suchWe asentered into agreements for three new markets, the Company’sNetherlands, plannedEstonia, entryand intoMauritius, the Netherlands in late 2026 as announced induring the first quartertwo quarters of 2026;fiscal 2026. In the first half of the year, we opened 59 shops, nearly all franchised and remain on track to open at least 100 new shops in 2026.

•Expanding profit margins: Expand profit margins through greater operational efficiency. During the first quartertwo quarters of fiscal 2026, we focusedcontinued our focus in the U.S. on making doughnuts more efficiently through optimizing production, streamlining Hub activities,operations, and improving labor productivity. In addition, we arecontinued focusedour focus on delivering fresh doughnuts more efficiently through outsourcing U.S. logistics and improvingimproved route managementmanagement, andimproved demand planning, andoptimization through optimizingof production and delivery schedulesschedules, and outsourced U.S. logistics to supportthird-party cost-effectivelogistics expansion.(“3PL”) Duringcarriers the first quarter, we continued to outsource some of our U.S. fresh deliveries to 3PL carriers, andwhich we completed the transition to 3PL carriers duringin the second quarter of fiscal 2026; and2026.

We continue to prioritize expanding our digital channel sales, which grew in the first quartertwo quarters of fiscal 2026 compared to the first quartertwo quarters of fiscal 2025. Growth in our digital channel is due to improvements in our branded digital platform as well as increasing product availability through third party digital channels, including delivery apps and our customers’ digital platforms. Innovation is also a significant driver of frequency as we create promotions and products that attract media outlets to our brand across our Global Points of Access. Additionally, we deliver new product experiences that align with seasonal and trending consumer and societal interests and create positive connections through simple, frequent, brand-focused offerings that encourage shared experiences. During the firstsecond quarter of fiscal 2026, we delivered the joy that is Krispy Kreme by spotlighting our core offerings such as the Original Glazed doughnut, supplemented by specialty doughnut offerings and seasonal activations, including Chocomania,MilkBar Valentines,Collection, Mother’s Day with minis for Mom, Masters of the Universe, Match Day Dozen, and many others around the world.

On June 24, 2025, we and McDonald’s USA announced that our companies jointly decided to terminate the Business Relationship Agreement effective July 2, 2025, resulting in the reduction of approximately 2,400 fresh delivery doors in the third quarter of fiscal 2025. We worked to quickly remove costs related to the McDonald’s USA partnership which we expect to continue positively impacting profitability trends for our U.S. segment in the first half of fiscal 2026.partnership. Refer to Note 1, Description of Business and Summary of Significant Accounting PoliciesPolicies, to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q for further information.information (the “Condensed Consolidated Financial Statements”).

The imposition of tariffs by the U.S. on imports has heightened uncertainty in the global trade environment. These tariffs, along with retaliatory measures by other countries, may increase inflationary pressure and raise the costs of our imported commodities, including, but not limited to, vegetablepalm oil. Additionally, the broader implications of tariff-driven price increases could influence consumer spending habits and negatively affect our business. These factors have caused, and may continue to cause, substantial uncertainty and volatility in financial markets, and may result in further retaliatory measures.

The Company has revised previously issued financial information included in this Quarterly Report .Report. The revisions do not affect the Company’s previously reported operating results, cash flows, or financial condition apart from the reclassification within the equity section of the balance sheet and the required redemption value accretion recognized throughout fiscal 2025.

The following table presents our Global Points of Access, by segment and type, as of the end of the firstsecond quarter of fiscal 2026, the firstsecond quarter of fiscal 2025, and fiscal 2025, respectively:

(1)During the first quarter of fiscal 2026, certain points of access moved from the U.S. and International segments to the Market Development.Development segment. Refer to Note 3, Acquisitions and DivestituresDivestitures, to the Condensed Consolidated Financial Statements for more information on the impact of refranchising.

As of MarchJune 29,28, 2026, we had 15,12515,665 Global Points of Access, with 2,1402,170 Krispy Kreme branded shops, 4749 Carts and Food Trucks, and 12,93813,446 fresh delivery doors. During the firstsecond quarter of fiscal 2026, we added a net 1530 additional Krispy Kreme branded Doughnut Shops globally, in countries such as Spain, Brazil, and Taiwan, among many others. The decrease to the total Global Points of Access compared to the end of the firstsecond quarter of fiscal 2025 primarily relates to the exit of fresh delivery doors related to the strategic closure of underperforming fresh delivery doors, including the exit of fresh delivery doors related to the termination of the Business Relationship Agreement with McDonald’s USA.

We also utilize “Hubs” as a key performance indicator. We have an omni-channel strategy to reach more consumers where they are and drive sustainable, profitable growth, and this strategy is supported by a capital-efficient Hub and Spoke distribution model that provides a route to market and powers profitability. Our Hot Light Theater Shops and Doughnut Factories serve as centralized production facilities (“Hubs”). From these Hubs, we deliver doughnuts to our Fresh Shops, Carts and Food Trucks, and fresh delivery doors (“Spokes”) primarily through an integrated network of Company-operated delivery routes, designed to ensure quality and freshness. During the firstsecond quarter of fiscal 2026, we continuedcompleted tooutsourcing outsourceof our U.S. deliveries to 3PL carriers, and we completed the outsourcing to 3PL carriers in the U.S. in the second quarter of fiscal 2026.carriers. In the U.S. Segment,segment, the decrease to the total number of Hubs as of MarchJune 29,28, 2026 compared to the end of the firstsecond quarter of fiscal 2025 primarily relates to the impact of refranchising and the optimization of our production network in the U.S.

The following table presents our Hubs, by segment and type, as of the end of the firstsecond quarter of fiscal 2026, the firstsecond quarter of fiscal 2025, and fiscal 2025, respectively:

(1)During the first quarter of fiscal 2026, certain Hubs moved from the U.S. and International segments to the Market Development.Development segment. Refer to Note 3, Acquisitions and Divestitures, to the Condensed Consolidated Financial Statements for more information on the impact of refranchising.

Non-GAAP financial measures are not standardized and it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP or a substitute for results reported under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, we urge you to review our non-GAAP financial measures in conjunction with ourthe historicalCompany’s Condensedfinancial Consolidated Financial Statements and notes thereto included in this Form 10-Qstatements and not to rely on any single financial measure.

Organic revenue growth/(decline) measures our revenue growth trends excluding the impact of acquisitions, divestitures, and foreign currency, and we believe it is useful for investors to understand the expansion of our global footprint through internal efforts. We define “organic revenue growth/(decline)” as the growth/(decline) in revenues, excluding (i) the impact of revenues of acquired shops owned by us for less than 12 months following their acquisition, (ii) the impact of foreign currency exchange rate changes, (iii) the impact of shop closures related to restructuring programs, (iv) the impact of the divestiture of shops through refranchising, and (v) the impact of revenues generated during the 53rd week for those fiscal years that have a 53rd week based on our fiscal calendar defined in Note 1, Description of Business and Summary of Significant Accounting PoliciesPolicies, to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q.Statements. See “Results of Operations” for our organic growth/(decline) calculations for the periods presented.

(1)Primarily foreign translation gains and losses in each period. The quarter and two quarters ended MarchJune 30,29, 2025 also consists of equity method income from Insomnia Cookies following the divestiture of a controlling interest in Insomnia Cookies during fiscal 2024.2024 until the sale of our remaining interest in the second quarter of fiscal 2025.

(2)The quarter and two quarters ended MarchJune 29,28, 2026 consists primarily of $4.2$2.1 million and $6.3 million, respectively, of costs associated with the evaluation and execution of refranchising certain equity markets as well as $2.9$1.3 million and $4.2 million, respectively, in costs associated with the transition to third party logistics in the U.S.,U.S.; of that amount $1.6$1.7 million and $3.3 million, respectively, is related to non-cash impairments. The quarter and two quarters ended MarchJune 30,29, 2025 consists primarily of $2.4$20.9 million and $23.3 million, respectively, of costs associated with preparing for and executing the U.S. national expansion (including McDonald’s).

(6)The quarter and two quarters ended MarchJune 29,28, 2026 andconsist primarily of costs associated with restructuring the Australia and New Zealand business. The quarter and two quarters ended MarchJune 30,29, 2025 consist primarily of costs associated with restructuring of the U.S. and U.K. businesses.

(8)The quarter and two quarters ended MarchJune 29,28, 2026 consists primarily of $0.8 million and $1.6 million, respectively, of legal fees primarily related to shareholder derivative litigation. Refer to Note 1313, Commitments and Contingencies, to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q for furthermore information.information on the Company’s pending litigation. The quarter and two quarters ended MarchJune 30,29, 2025 consists primarily of $4.4$0.9 million and $5.3 million, respectively, in costs related to remediation of the 2024 Cybersecurity Incident, including fees for cybersecurity experts and other advisors.

(10)Tax impact of adjustments calculated applying the applicable statutory rates. The quarter and two quarters ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 also include the impact of disallowed executive compensation expense. The Company’s adjusted effective tax rate is (11.4)%17.7% and 50.5%4.4% for the quarters ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025, respectively.

(11)Consists of the recognition of previously unrecognized tax benefits unrelated to ongoing operations of $0.7$0.1 million.million and $0.8 million for the quarter and two quarters ended June 28, 2026.

(2)Includes Insomnia Cookies revenues (through the date of deconsolidation of July 14, 2024) and Fresh Revenues generated by Hubs without Spokes.

(45)International Sales per Hub comparative data has been restated in constant currency based on current exchange rates.rates and includes operations in Japan through the date of deconsolidation of March 2, 2026.

In our International segment, where the Hub and Spoke model originated, we had Sales per Hub of $9.9$9.5 million during the trailing four quarters ended MarchJune 29,28, 2026, largely consistent with the $9.7 million generated in the full fiscal year 2025 and the $9.9 million generated in the full fiscal year 2024. The International segment illustrates the benefits of leveraging our Hub and Spoke model as the most efficient way to grow the business, as shown by the consistent Sales per Hub and higher Adjusted EBITDA margins despite elevated commodity costs and macroeconomic conditions. In the U.S. segment, we had Sales per Hub of $5.1 million during the trailing four quarters ended MarchJune 29,28, 2026, up from the $4.7 million generated in the full fiscal year 2025 and the $4.9 million generated in the full fiscal year 2024. In the U.S. we continue our efforts to increase the number of quality Spokes served by our Hubs. During fiscal 2025, we identified and exited underperforming Spokes in lineconnection with our effortsturnaround to optimize the segment.plan. We expect to increase the number of quality Spokes through growth with fresh delivery customers across the U.S. coupled with a continued focus on identifying and addressing underperforming fresh delivery doors.

We also utilize “Systemwide Sales” as a key performance indicator. Systemwide Sales reflects global sales in U.S. dollars on a nominal basis of all Krispy Kreme products, whether operated by the Company or franchisees, excluding mix, equipment, and royalty revenue. Sales from franchisees are reported to the Company by such franchisees and are not included in Company revenues. The Company believes Systemwide Sales information is important because it is indicative of the health of the Company’s brand and aids in understanding the Company’s financial performance.

In the first quarter ofand fiscaltwo quarters ended June 28, 2026, we generated Systemwide Sales of $485.3$497.3 million.million and $983.0 million, respectively.

Quarter ended MarchJune 29,28, 2026 compared to the Quarter ended MarchJune 30,29, 2025

The following table presents our unaudited condensed consolidated results of operations for the quarter ended MarchJune 29,28, 2026 and the quarter ended MarchJune 30,29, 2025:

The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the quarter ended MarchJune 29,28, 2026 compared to the quarter ended MarchJune 30,29, 2025:

Total net revenue declined $8.2$48.8 million, or approximately 2.2%,12.8%, from the firstsecond quarter of fiscal 2025 to the firstsecond quarter of fiscal 2026, primarily due to the $9.1$55.9 million reduction associated with refranchising efforts taken in the U.S. and International segments. The results of refranchised businesses are reported within the U.S. or International segments, as applicable, prior to the respective dates of divestiture, and are reported within the Market Development segment, following the respective dates of divestiture. Organic revenue decreased by approximately 2.6%,0.3%, primarily driven by a decline in bothGlobal Points of Access and in the U.S.International and Market Development,segment, partially offset by growth in the InternationalMarket Development segment. The organic revenue decrease reflects a Global Points of Access decline of 2,857,2,448, or 15.9%,13.5%, primarily impacted by the strategic closure of underperforming fresh delivery doors,doors that was completed in the third quarter of 2025, including those associated with the termination of the Business Relationship Agreement with McDonald’s USA.

Our U.S. segment net revenue declined $15.0$57.4 million, or approximately 6.3%,25.0%, from the firstsecond quarter of fiscal 2025 to the firstsecond quarter of fiscal 2026, primarily due to the $5.9$57.5 million reduction associated with refranchising of the U.S. business and the strategic closure of underperforming fresh delivery doors. U.S. organic revenue declinedincreased by approximately 4.0%,0.1%, primarily driven by the strategic closure of underperforming fresh delivery doors,doors including those associated within the terminationsecond quarter of thefiscal Business Relationship Agreement with McDonald’s USA.2025.

Our International segment net revenue increaseddeclined $5.6$15.4 million, or approximately 4.7%,11.6%, from the firstsecond quarter of fiscal 2025 to the firstsecond quarter of fiscal 2026, aideddue primarily to the impacts of the refranchising of Japan, partially offset by foreign currency translation impacts of $10.5$6.9 million,million. International organic revenue decreased by 5.1%, driven primarily by declines in the U.K. and Australia, partially offset by the refranchising of Japan. International organic revenue grew by approximately 0.4%, driven primarily by strengthgrowth in Canada and Mexico.Canada.

Our Market Development segment net revenue increased $1.2$24.1 million, or approximately 6.4%,142.3%, from the firstsecond quarter of fiscal 2025 to the firstsecond quarter of fiscal 2026, primarily due to the $2.1$18.0 million benefit from refranchising in the first quarter of fiscal 2026 (the results of refranchised businesses are reported within the U.S. or International segments, as applicable, prior to the respective dates of divestiture, and are reported within the Market Development segment, following the respective dates of divestiture).2026. Market Development organic revenue declinedincreased by approximately14.4%, 4.3%,primarily asdue growthto an increase in royalty revenuerevenues primarily from certainthe internationalMiddle franchiseEast, markets was more than offset by lower franchisee product salesJapan, and less shipments of equipment to franchisees.Brazil.

Operating expenses: Operating expenses decreased $10.7$51.8 million, or 5.4%,24.6%, from the firstsecond quarter of fiscal 2025 to the firstsecond quarter of fiscal 2026, driven mainly by refranchising transactions completed in the first quarter of fiscal 2026, coupled with an increase in operational efficiencies. Operating expenses as a percentage of revenue decreased by approximately 170750 basis points, from 53.0%55.5% in the firstsecond quarter of fiscal 2025 to 51.3%48.0% in the firstsecond quarter of fiscal 2026, primarily due to increased operational efficiencies as we continue to deliver on our turnaround plan.

Selling, general and administrative expense: Selling, general and administrative (“SG&A”) expense decreased $1.4$9.2 million, or 2.3%,14.7%, from the firstsecond quarter of fiscal 2025 to the firstsecond quarter of fiscal 2026.2026, driven mainly by lower employee costs. As a percentage of revenue, SG&A expense remained relatively consistent with the comparable period.

Depreciation and amortization expense: Depreciation and amortization expense decreased $1.8$8.8 million, or 5.3%,24.5%, from the firstsecond quarter of fiscal 2025 to the first quarter of fiscal 2026. As a percentage of revenue, Depreciation and amortization expense decreased approximately 30 basis points, from 9.0% in the first quarter of fiscal 2025 to 8.7% in the firstsecond quarter of fiscal 2026, primarily driven by lower finance lease amortization expense and fixed asset impairments taken in the second quarter of fiscal 2025 following the termination of the Business Relationship Agreement with McDonald’s USA. As a percentage of revenue, Depreciation and amortization expense decreased 120 basis points, from 9.4% in the second quarter of fiscal 2025 to 8.2% in the second quarter of fiscal 2026.

Income tax (benefit)/expense: Income tax expensebenefit was $3.6$4.3 million in the firstsecond quarter of fiscal 2026, while income tax benefit was $2.7$20.5 million in the firstsecond quarter of fiscal 2025. The variance was primarily driven by the refranchisingtax effect of W.K.S.nondeductible Krispygoodwill Kremeimpairment and Krispy Kreme Japan and an increase in pre-tax resultscharges in the firstsecond quarter of fiscal 2026.2025.

Results of Operations by Segment – Quarter ended MarchJune 29,28, 2026 compared to the Quarter ended MarchJune 30,29, 2025

U.S. segment Adjusted EBITDA increased $9.6$3.8 million, or 60.6%,38.5%, with margin expansion of 480370 basis points to 11.5%8.0% in the firstsecond quarter of fiscal 2026 compared to the firstsecond quarter of fiscal 2025, primarily driven by productivityoperational initiatives,efficiencies, and SG&A savings,savings andas thewe removalcontinue ofto costsdeliver followingon theour terminationturnaround of the Business Relationship Agreement with McDonald’s USA.plan.

International segment Adjusted EBITDA decreased $0.4$4.0 million, or 2.9%,22.2%, primarily due to refranchising of the Japan business. The margin decline of 90160 basis points to 11.6%12.1% in the firstsecond quarter of fiscal 2026 compared to the firstsecond quarter of fiscal 2025,2025 was due to lower Adjusted EBITDA in the U.K. and Australia and Canada.the refranchising of Japan.

Market Development segment Adjusted EBITDA increased $0.6$10.4 million, or 5.3%,116.7%, with margin decline of 60560 basis points to 57.5%47.3% in the firstsecond quarter of fiscal 2026 compared to the firstsecond quarter of fiscal 2025, driven mainly by changes in the regional mix of productU.S. sales.sales associated with the WKS Refranchising, and to a lesser degree the refranchising of Japan.