Krispy Kreme Stock Plummets 80% Since IPO: Is the Doughnut Giant Unsustainable

Krispy Kreme’s stock price has collapsed since its high-profile return to public markets. Shares that debuted at $17 in 2021 now trade below $4. This represents a loss of nearly 80% of shareholder value in just four years. Investors are left wondering what happened to the beloved doughnut brand’s financial promise.

The company is now scrambling to implement a major restructuring. According to financial data, operating expenses have soared to unsustainable levels. Management is trying to cut costs through outsourcing and refranchising to stop the bleeding.

The Staggering Financial Losses Behind the Glaze

Krispy Kreme generated over $1.1 billion in sales through the first three quarters of 2025. Despite this, the company lost roughly $100 million in that same period. A massive $400 million non-cash impairment charge further complicated the picture.

The core problem is a cost structure that devours revenue. In 2025 alone, operating expenses hit $600 million. That figure represents more than half of the company’s total sales. Simply put, it costs Krispy Kreme too much to make and sell its doughnuts.

High costs for ingredients, labor, and logistics are to blame. The capital-intensive nature of fresh food retail is a constant challenge. Financial data shows the company rarely achieves profitability, even in its better years.

A Desperate Strategy Shift to Save the Business

Facing intense pressure, executives are pursuing a drastic turnaround plan. The strategy focuses on two main pillars: outsourcing complex logistics and refranchising company-owned shops.

Logistics is a primary target. Moving millions of doughnuts nationwide is incredibly expensive. The company now seeks third-party partners to handle distribution, hoping for greater efficiency and lower costs.

The refranchising effort aims to shift capital burdens. By selling locations to franchisees, Krispy Kreme can generate cash and reduce its own operational risks. The goal is to create a leaner, more asset-light business model.

These changes are fraught with difficulty. Franchisees demand attractive terms, which can limit immediate financial benefits for the parent company. Success is not guaranteed, but the current path is clearly unsustainable.

Investor Confidence Evaporates as Fundamentals Worsen

The stock’s performance highlights a brutal disconnect. Consumer love for the product has not translated into investment returns. The brand’s cultural cachet has been overshadowed by poor financial metrics.

Major investment advisories have taken note. The Motley Fool’s Stock Advisor service recently listed its top 10 stock picks for 2025. Krispy Kreme did not make the list. Analysts instead highlighted companies with proven profitability and growth, like Nvidia.

This sends a clear signal to the market. Sound business fundamentals matter more than brand recognition. For Krispy Kreme, the path to winning back investors requires demonstrable progress on the bottom line.

The future of Krispy Kreme stock hinges entirely on its costly restructuring plan delivering real profits. Without a swift turnaround, the doughnut icon’s financial troubles may only deepen.

Info at your fingertips

Why did Krispy Kreme stock drop so much?

The stock fell due to massive operating costs and consistent losses. Expenses reached $600 million in 2025, overwhelming its revenue and destroying investor confidence.

Is Krispy Kreme a publicly traded company?

Yes. Krispy Kreme returned to public markets in 2021, trading on the Nasdaq under the ticker DNUT. Its performance since the IPO has been deeply disappointing for shareholders.

What is Krispy Kreme doing to fix its business?

Management is outsourcing its delivery logistics and refranchising company-owned stores. These moves aim to drastically reduce operating expenses and capital requirements.

Did Krispy Kreme make a profit in 2025?

No. Through the first three quarters of 2025, Krispy Kreme reported a net loss of approximately $100 million, even after adjusting for a significant one-time charge.

Do analysts recommend buying Krispy Kreme stock now?

Sentiment is largely cautious. Prominent analyst services have not included it among their top investment picks for 2025, reflecting concerns over its ongoing profitability challenges.