Krispy Kreme narrowed its losses as the doughnut chain executes a four-part turnaround strategy to stabilize its balance sheet and boost profitability. The company reported a quarterly loss of $20.3 million for the second quarter of 2026, a massive improvement compared to the $435.3 million loss recorded in the same period the previous year. This shift comes as the chain moves away from its former reliance on a partnership with McDonald’s, which ended last year and left the business with a significant debt load and no major revenue stream.
During the earnings call on Thursday, CEO Josh Charlesworth highlighted that the plan is gaining traction. The strategy focuses on refranchising locations, prioritizing asset-light development, and cutting costs to achieve long-term profitability. Revenue for the quarter dropped 12.8%, a decline the company attributes to the ongoing refranchising efforts and the closure of underperforming locations. Despite the revenue dip, systemwide sales reached $497.3 million, an increase of 1.1% in constant currency and 2.6% when sales from the now-ended McDonald’s partnership are excluded.
The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged more than 43% to $28.8 million. Capital expenditures also dropped significantly, falling by 70% in the first half of the year. Charlesworth stated that the results reflect “continued significant progress on our turnaround to strengthen the balance sheet, reduce leverage, and drive sustainable, profitable growth.” He noted that the company is maintaining its previously issued guidance for 2% to 4% systemwide sales growth.
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The turnaround involves divesting international assets and signing new deals to expand franchised operations. During the quarter, the company refranchised its Japan business and increased its stake in a joint venture with franchisee WKS Restaurant Group to 80%. Since Jan. 1, 59 new shops have opened globally, with nearly all operated as franchised locations. Krispy Kreme also finalized agreements to debut in three new international markets: the Netherlands, Estonia, and Mauritius.
Efficiency measures have also driven the improvement. In April, the company completed the outsourcing of its U.S. delivery logistics, a move that contributed to margin expansion. Consolidated adjusted EBITDA margin in the second quarter rose from 5.3% to 8.7% year-over-year, with the U.S. segment driving a 370-basis-point increase. Additionally, the company added 448 fresh delivery doors in the U.S. through partnerships with major retailers like Walmart, Target, and Costco, resulting in a 33.2% year-over-year jump in average revenue per door per week to nearly $700.