Krispy Kreme, Inc. Q4 FY2025 earnings call

• Re-franchising: Announced strategic re-franchising agreement with Unison Capital for Japan, expect cash proceeds ~$65 million. Plan to re-franchise other international markets, target 2-3 deals in 2026. Reduce ownership in existing joint venture in Western U.S. - Improving returns on capital: 2025 CapEx decreased 19% from 2024, expect 2026 CapEx to be nearly half. International development pipeline has over 1,700 shops across 40+ countries, expect over 100 shops opening in 2026. - Expanding margins: Simplifying business, reducing costs. In U.S., improved production planning, labor optimization, streamlined hub operations. 57% of U.S. fresh delivery network outsourced by end of 2025, expect transition complete in 2026. - Sustainable, profitable U.S. growth: Exited underperforming U.S. doors, added new higher volume, higher margin doors. Marketing strategy focused on everyday sales, limited-time offerings, digital growth. Loyalty platform has over 17 million members in U.S.

In the fourth quarter, adjusted EBITDA increased significantly. Net revenue decreased 2.9%. In the U.S., organic revenue declined 5.8% due to exiting underperforming doors, but adjusted EBITDA increased 39.1%. Company-owned international segment had negative organic growth of 0.3% but adjusted EBITDA rose 4.1%. Market development segment organic revenue declined 4.9% but adjusted EBITDA rose 2.1%. System-wide sales in 2025 were $2 billion, expected to grow 2%-4% in 2026. In 2025, ~75% of system-wide sales were from company-operated locations, expected to be ~50% from franchisees by 2027.

• System-wide sales expected to be up 2% to 4% in constant currency from $1.96 billion in 2025. - Expect to open at least 100 shops globally. - CapEx of $50 to $60 million. - Positive free cash flow and net leverage ratio at or below 5.5 times.

Q: Are you starting to think about potential U.S. hub growth that can provide a good return, or is it still too early?

A: In the US, there are underpenetrated customers like Walmart, Target, Costco, Sam's. Have plenty of opportunity to grow as saw in fourth quarter with over 200 door expansion. Capacity utilization is ~25%, able to pursue growth without significant investment in infrastructure, which is compelling.

Q: For 2026, how much more do you guys have left to go on closures, is it going to be significant in the first half of 2026 or will it come down from here?

A: Not making closures now, focused on optimizing production, delivery, and site support to improve productivity and drive efficiency, with expectation of EBITDA growth in 2026, including first quarter EBITDA growing vs same quarter a year ago