Wedbush Remains Bullish on Krispy Kreme Doughnuts (KKD) Following 1Q16 Results
Wedbush reiterates an Outperform rating and $24.00 price target on Krispy Kreme (NYSE: KKD) following 1Q16. EPS of $0.24 came in above consensus of $0.22. KKD increased EPS guidance to $0.80-0.85 from $0.79-0.85 previously.
Analyst Nick Setyan commented, "Unit-level margin is now explicitly broken out, and improved 270bps YoY to 18.5%. Given continued focus on gross margins and shift in mix to higher-margin retail-only factory stores, we expect continued UL margin improvement. Guidance continues to call for $55-59M adj. net income, with EPS expected at $0.80-0.85 from $0.79-0.85 previously, reflecting the benefit from share repurchases completed to-date. With FQ1 behind us, we see less risk to guidance from incremental FX headwinds and adverse weather, with continued mix benefit, easier comparisons, the loyalty rollout, and an evolving marketing campaign ahead."
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Shares of Krispy Kreme closed at $17.40 yesterday.