Krispy Kreme Inc. said Tuesday it’s exploring its strategic options for Insomnia Cookies, including a potential all-cash sale.
The company
DNUT,
acquired a controlling stake in Insomnia Cookies in 2018 and is expecting the provider of warm cookies and ice cream for delivery to generate sales of about $230 million in fiscal 2023.
Insomnia was started as a late-night bakery in Philadelphia by then-student Seth Berkowitz and has been delivering its warm cookies day and night since 2003.
“Today’s decision enables Krispy Kreme to unlock shareholder value and focus on its core strategy of producing, selling and distributing fresh doughnuts daily,” the company said in a statement.
Krispy Kreme currently sells doughnuts from nearly 13,000 points of access daily and is aiming to expand to more than 75,000 points, by entering three to five new countries a year and developing channels like quick service restaurants, said Chief Executive Mike Tattersfield in a statement.
Tattersfield is planning to step down from the role at the end of the year, after about 7 years in the role. He will be succeeded on Jan. 1 by current Chief Operating Officer Josh Charlesworth.
For more: Krispy Kreme stock slumps, as CEO to step down after about 7 years in the role
For its second-quarter earnings posted on Aug. 10, Krispy Kreme matched profit expectations while revenue came up short. For 2023, the company affirmed its guidance ranges for adjusted EPS of 31 cents to 34 cents and for revenue of $1.65 billion to $1.68 billion
The company has hired Evercore and Morgan Stanley as financial advisers.
The stock surrendered most of its early gains to trade flat, but remains up 21% in the year to date, while the S&P 500
SPX
has gained 11%.
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