NEW YORK (AP) — Shares of Krispy Kreme are falling in premarket trading Tuesday due to a lackluster full-year earnings forecast.
On Monday the company predicted adjusted earnings of 71 cents to 76 cents per share for the year ending in February 2015. Analysts polled by FactSet are looking for earnings of 77 cents per share.
Wedbush's Nick Setyan said in a client note that there may be limited upside to Krispy Kreme's 2015 outlook considering the investments the company is making across its business segments. The analyst maintained a "Neutral" rating and $24 price target.
Mark Kalinowski of Janney Capital Markets kept a "Buy" rating for Krispy Kreme, partly because of its momentum in sales at stores open at least a year. Kalinowski said the company's third-quarter sales at U.S. franchised stores open at least a year rose 10.7 percent, beating his estimate for a 9.5 percent rise. Internationally, the metric declined 3.1 percent, but this was better than the 7 percent decline Kalinowski forecast.
Sales at stores open at least a year is a key gauge of a retailer's health because it excludes results from locations recently opened or closed.
Kalinowski anticipated that the stock would drop Tuesday on the disappointing full-year earnings forecast, but said that it presents a buying opportunity for investors.
Shares of Krispy Kreme Doughnuts Inc. declined $3.37, or 13.7 percent, to $21.18 before the market open. Its shares have more than doubled so far this year.