Krispy Kreme Inc. said Thursday it is expanding the Midwestern reach of its national in-store partnership with McDonald's to restaurants in Indiana and Ohio beginning in mid-November.
Krispy Kreme launched in October its first expansion beyond Kentucky with McDonald's locations in the Chicagoland area.
The companies initially projected having three Krispy Kreme flavors in more than 1,000 McDonald's locations by the end of the year, as well as more than 6,000 by the end of 2025 and more than 12,000 by the end of 2026.
Krispy Kreme chief executive Josh Charlesworth said in Thursday's third-quarter earnings that it expects to be in nearly 2,000 McDonald's locations by the end of the year.
Bank of America Corp. analysts have said the partnership could generate $350 million in annual sales, with Krispy Kreme likely getting 75% and McDonald's 25%.
Doughnuts would need to account for about 1% of McDonald's sales, or 4% of breakfast sales, to be considered a success, they said.
Krispy Kreme has said its long-term goal is to have at least 100,000 global points of access -- 15,000 of which would be in the U.S. The short-term goal is 33,000 by the end of 2026.
Krispy Kreme had 15,811 such global points of access as of Sept. 29, including 8,018 U.S. outlets.
Those are: delivered fresh daily outlets (13,752); fresh shops (1,638); theater shops (394); and carts and food trucks (47). The totals include company-owned and franchise locations.
Krispy Kreme reported having $39.6 million in third-quarter net income, compared with a $40.5 million loss a year ago.
The profit uptick mostly reflects the $87.13 million in proceeds gained from selling the majority stake in its Insomnia Cookies subsidiary in July to an investor group. Excluding the proceeds, Krispy Kreme had an adjusted loss of $2.5 million.
Diluted earnings were 23 cents, compared with a 24-cent loss a year ago. Adjusted earnings was a 1-cent loss.
Sales dropped 6.8% to $379.9 million.
Krispy Kreme updated its fiscal 2024 financial guidance that includes net revenue in a range of $1.65 billion to $1.685 billion, and adjusted earnings of between 11 and 22 cents.
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