Krispy Kreme Posts Loss, Sales Drop

Krispy Kreme Doughnuts Inc., the No. 2 U.S. doughnut maker, said Monday that it had a net loss in the fourth quarter as sales declined 16%.

Sales in the quarter ended Jan. 30 fell to about $153 million, Krispy Kreme said in a preliminary statement in a regulatory filing.

The Winston-Salem, N.C.-based company also said restatements would lower fiscal 2004 earnings more than it previously estimated.

The Securities and Exchange Commission filing Monday acknowledged that Krispy Kreme missed the deadline for its annual financial report. The company, which is under investigation for accounting fraud, hasn’t filed third-quarter results either and might not issue any reports until it restates the prior year’s earnings.

Krispy Kreme probably had losses in three of last year’s quarters as sales slid and investigations into its accounting began. The company, which has a new agreement with lenders to submit audited results by Dec. 15, said it couldn’t predict when it would be able to file its annual report.

Average weekly sales for the quarter declined 20% systemwide, the company said.

Krispy Kreme said restatements of fiscal 2004 earnings would cut net income by 9 cents to 10 cents a share. The company’s earlier estimate was as much as 8 cents.

Krispy Kreme also expects additional restatements for fiscal 2004 and earlier years and possibly for interim financial information for fiscal 2005.

Shares of Krispy Kreme fell 42 cents to $7.14 on the New York Stock Exchange. The shares have fallen 43% this year.

The NYSE can consider delisting a company that hasn’t filed its annual report nine months after the required date. The company can also receive an additional 90-day extension.