Donut Apocalypse Hits Krispy Kreme As Losses Amount to $33M During Failed McDonald's Quest…

So it appears Krispy Kreme just got bodybagged by reality, friends. Shares of $DNUT cratered 24% on Thursday, in one of the most unfortunate faceplants we’ve seen since Bud Light tried to rebrand itself as the world’s favorite punching bag. Why? Because they’ve officially paused their strategic rollout with McDonald’s to single-handedly increase America’s obesity rate by 5x. 

(Source: Giphy) 

In short, last year, Krispy Kreme and McDonald’s announced a partnership so aggressively American it could’ve been sponsored by NASCAR and insulin manufacturers. The plan was simple: flood every McDonald’s in the country with donuts. By 2026, you’d be able to order a Big Mac and a glazed dozen in a single breath. It was a true American dream, and analysts loved it. Until now. 

Turns out, America doesn’t want donuts with their McNuggets. Or at least not enough to justify the capex inferno Krispy Kreme lit trying to fulfill the Golden Arches’ demand. KK ramped up production with new hubs, new logistics, a.k.a. It’s own version of a Willy Wonka factory playbook. But instead of printing money, they printed losses. Again.

(Source: CNBC) 

Revenue has tanked. Costs have soared, and demand isn’t showing up in any of the 2.5k Ronald McDonald houses. The result of this? A A $33M net loss in Q1 and a humiliating downgrade from Truist, whose analyst straight-up said, “We are shocked by the speed at which the story fell apart.” Ooof. 

Now Krispy Kreme’s pulling its full-year outlook. They yanked their 2025 guidance, and now Josh Charleswith, Krispy’s CEO, is stuck explaining why the company’s long-term strategy has the structural integrity of a McFlurry machine with a “There’s a softness in the macro” description. 

(Source: Market Watch) 

Again, the unfortunate part here was that this was supposed to be a BFD for Krispy Kreme. Shares have been down over 70% over the past year, and this deal was their redemption song. Instead, it’s become a case study in how to bet the farm and lose the tractor. Meanwhile, the rest of the fast-food sector isn’t exactly thriving either. McDonald’s reported a 3.6% drop in U.S. same-store sales last quarter. Middle- and low-income customers are ghosting the arches, and if they’re not showing up for $5 bundles, they sure as hell aren’t impulse-buying a dozen donuts with their Filet-O-Fish. 

In the end, Krispy Kreme bet big, moved fast, and got absolutely smoked. Now they’re scrambling to cut costs and prune unprofitable locations (up to 10% of their U.S. network). Meaning, unless Krispy Kreme can pull a rabbit out of its hat, it’s going to get ugly. The donut bubble has popped, and it’s a tragedy. 

(Source: Giphy) 

Of course, only time will tell what the price action shows us, but for Krispy Kreme, it’s not looking as appealing as their glazed cakes. Which means, keep your eyes on both stocks and place your bets accordingly, friends. Until next time… 

P.S. Oh, I’m sorry, I didn’t know you liked getting rekt. Let’s face it, retail investors get the short end of the stick all day everyday. It’s the smart money’s world, and we are just living in it–only useful when it comes to liquidity purposes in the market. Meaning, if you’re as pissed off as I was when I found out Milli Vanilli was lip syncing the whole time, then it’s time to go from investing blind, to investing smart. Luckily for you, the key is right here as a Stocks.News premium member. Click here to see exactly how our premium members are printing while others quake in the face of today’s market chaos. 

Stocks.News holds positions in McDonalds as mentioned in the article.