Sometimes, the market just wants a win. Krispy Kreme, Inc. (DNUT) delivered one Thursday, with shares popping after the doughnut maker reported quarterly profits that were, well, sweeter than anyone expected.

The company didn't just beat on the bottom line; it also edged past sales forecasts and gave investors a roadmap for growth that involves opening more shops and finally generating some positive cash flow. It was enough to make the stock one of the day's top performers.

The Numbers Behind the Glaze

For the fourth quarter, Krispy Kreme reported adjusted earnings per share of nine cents. That's triple the three cents analysts were looking for. Sales came in at $392.367 million, just ahead of the Street's view of $386.715 million.

Now, here's the interesting part: that sales beat came even as organic revenue—which strips out the impact of new or closed locations—actually fell by 3.9%. The company says that drop is intentional, a result of "strategic door closures." They're pruning the underperformers to make the whole network healthier.

That strategy shows up in the segment details. In the U.S., net revenue fell 6.1% to $230.2 million, with organic revenue down 5.8%, largely due to those closures. Internationally, revenue grew 2.9%, helped by currency translation. The smaller Market Development segment saw a slight 4% decline.

The real profit driver was a big jump in adjusted EBITDA, which hit $55.565 million for the quarter, up significantly from $45.915 million a year ago. The company is spending to grow, too, with $97.9 million in capital expenditures for fiscal 2025, most of it in the U.S. to support the expansion plan.

As of late December, Krispy Kreme had 15,194 global points of access—that's shops, delivery hubs, the works. Digital channels made up 18.2% of retail sales. The company ended the quarter with $42.390 million in cash.

What's Next for the Doughnut Empire?

Looking ahead to 2026, management is guiding for systemwide sales to grow 2% to 4% in constant currency. They plan to open at least 100 new shops globally, after ending 2025 with 2,125 locations.

Perhaps most importantly for investors watching the bottom line, capital spending is expected to drop to a range of $50 million to $60 million, and the company says it expects to generate positive free cash flow for the year.

In short, Krispy Kreme is telling a story of profitable growth. They're closing the bad shops, opening new ones in better spots, and promising that all this activity will finally put more cash in the corporate till. The market, at least for today, is eating it up. Shares were trading higher by 30.10% to $3.89.