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Krispy Kreme (DNUT-0.72%) stock fell a whopping 25% on Thursday, after the company announced a pause to its partnership with McDonald’s (MCD+0.89%).
The doughnut chain first unveiled the plan last March, saying its products would soon appear in McDonald’s nationwide, reaching all 13,500 U.S. locations by the end of 2026. That news sent Krispy Kreme stock soaring, up more than 39% at close, the largest one-day rise since going public.
But while unveiling its latest quarterly earnings on Thursday, the company said it’s “reassessing” the rollout and does not expect to launch any additional restaurants in the second quarter.
The stock closed down 24.7% on the day, down to $3.26 per share, its lowest level since the company went public in July 2021.
Krispy Kreme doughnuts have since become available in more than 2,400 McDonald’s restaurants—but that’s all for now.
Profitability appeared to be underscoring the backtrack. Krispy Kreme reported a net loss of $33 million for the quarter ended March 30. To achieve the nationwide rollout, the company invested in expanding capacity quickly. This weighed on profits, with the firm posting three quarterly net losses in the past year.
The company also withdrew its prior full year outlook, and did not provide a revised figure, citing “macroeconomic softness and the uncertainty around the McDonald’s deployment schedule.“
“While we expect the macro environment to remain challenging, we are focused on positive cash flow, higher returns on capital, and our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth,” Krispy Kreme CEO, Josh Charlesworth, said in a statement.