Krispy Kreme plans board overhaul to boost lagging performance

Business Journals

25-04-2025

THE REMAINDER OF THIS ARTICLE IS FOR PREMIUM MEMBERS
The company is bringing in heavy hitters from the food and beverage industry to help right the ship as its stock price sinks.
Story Highlights Krispy Kreme nominates new board members as stock price sinks.
'Turnaround group' of nominees are food and beverage industry veterans.
Board vote follows recent C-suite changes as company eyes expansion strategy.
Krispy Kreme Inc. (NASDAQ: DNUT) is looking to shake up its board of directors as its share price continues to lag.
Shares of the Charlotte-based doughnut chain fell to $4.30 as of the market's close on April 24. That represents a decline of more than 67% from its 52-week high of $13.25.
The company's efforts to reshape its board include nominations of four new members — and reducing its number of board seats to nine. It has 11 seats currently.
GET TO KNOW YOUR CITY
Find Local Events Near You
Connect with a community of local professionals.
Explore All Events
The new nominees are: Bernardo Hees, former Burger King and Kraft Heinz CEO; Patrick Grismer, former CFO at Starbucks; Easwaran Sundaram, former chief digital and technology officer at Jet Blue; and Gordon von Bretten, a senior partner at JAB Holdings Co.
Six members of Krispy Kreme's board are not up for reelection, including chair Olivier Goudet, a senior investment adviser at German investment partnership JAB.
The nominees would join current board members Josh Charlesworth, also Krispy Kreme's CEO, Marissa Andrada, Patricia Capel, David Deno and Gerhard Pleuhs, who are up for reelection.
'No confidence' vote as Krispy Kreme stock languishes
A vote will take place at the company's annual meeting on June 17. The board is expected to form a strategy and operating committee chaired by nominee Hees following that meeting.
Potential board member von Bretten would be a new representative for JAB. Its subsidiary, JAB Indulgence B.V., held a more than 44% stake of Krispy Kreme as of Aug. 12, according to U.S. Securities and Exchange Commission filings.
JAB acquired Krispy Kreme and took it private in 2016. It launched an initial public offering for the doughnut chain in 2021.
Sweeping changes to the board can be driven by activist shareholders or other catalysts — but Krispy Kreme has not indicated that is a driver, says Andrew Wolf, senior analyst at C.K. King & Associates.
'It's an acknowledgement their execution hasn't been what they want. The stock has really underperformed,' he says. 'It's a no confidence vote from Wall Street.'
Krispy Kreme reported net revenue of $1.67 billion for fiscal 2024, down 1.2% from a year prior. Net income for the year was $3.8 million, compared to a loss of $36.6 million in fiscal 2023. Those results reflect its sale of Insomnia Cookies as well as a cybersecurity incident that disrupted operations and had an estimated $10 million impact.
Recent C-suite changes as company plots expansion moves
The potential board changes come as Krispy Kreme works to reposition the brand and grow into 'a bigger and better Krispy Kreme,' Charlesworth said during the company's quarterly earnings call in February.
The company has overhauled its C-suite, naming four top execs in January. That includes Nicola Steele as chief operating officer, Dave Skena as chief growth officer, Alison Holder as chief product officer, and Raphael Duvivier as president of international.
Charlesworth says Krispy Kreme has adopted a strategy that aims to maximize U.S. expansion through its shops and partnerships with McDonald's, Kroger, Publix and Target.
'An added benefit of this expansion with national partners is the opportunity to identify and close existing underperforming doors, which we expect to do in 2025,' Charlesworth says.
Krispy Kreme operates in 40 countries, with doughnuts available at more than 17,500 access points. Digital sales represented 14.4% of retail sales for the last fiscal year. Krispy Kreme is evaluating refranchising for international markets.
'Our transformation continues in 2025 with clear business priorities that are rooted in our strategy,' Charlesworth says.
'Turnaround group' will determine Krispy Kreme's fate
Krispy Kreme's capital-light international expansion strategy will allow the company to redeploy capital, with the U.S. representing its biggest opportunity for growth. It also will boost the balance sheet and simplify operations, Wolf says.
He referenced Krispy Kreme's contract with McDonald's and those types of partnerships as a potential win.
'The positioning is the opportunity. The execution is where they've been struggling,' Wolf says.
The board nominees are seasoned professionals with significant experience. That signifies that the company recognizes the need for change, says Steven Cox, marketing professor at Queens University's McColl School of Business.
'This is a turnaround group,' he says. 'Highly experienced board members are not inexpensive, but the fate of the company depends upon the actions they take.
A major disadvantage is lack of experience in the doughnut industry — but nominating those with a proven track record could generate fresh ideas, Cox adds.