Tomahawk, WI 9/03/2013 (BasicsMedia) –  The earnings season of Krispy Kreme Doughnuts (NYSE:KKD) had always presented double digit growth in the share prices to the investors for the past two years. However, this had not been the case for the recent quarterly reports presented by the restaurant chain, which had ascertained that nothing is certain when it comes to investing in the markets. The company did not prove strong to meet out the expectations of the analysts and had fell short by 2 cents per share in the earnings estimates. It would prove essential to take a deeper look at the present scenario to understand if the stock of KKD is really pessimistic.

Earnings reports for 2Q13

The second quarter earnings for Krispy Kreme Doughnuts were reported to be at $0.14 per share, while the analyst estimates had been at $0.16 per share. It was observed that the adjusted income had increased by 17% over the same quarter of previous year. Revenues were reported to be at $112.7 million against the consensus estimate of analysts at $111.36 million. The comparative store sales for the company had increased by 10%, which proved to be continuous increase reported for the 19th consecutive quarter, driven primarily by heavy traffic to the stores.

Phenomenal growth in same store sales

Investors were boosted up heavily by the huge increase in the same store sales of the restaurant chain which was driven primarily by increasing foot traffic to the stores. The recent push adopted by the Krispy Kreme Doughnuts into the new markets and expansion of the menu list proves to be paying off well as could be observed from the ability to present heavy increase in same store sales, passing off all the hindrances related to customer loyalty and price hikes of the products.

Yet another factor that is expected to present a positive push to the restaurant chain in the near future is its focus on the healthier food options in the menus. Though the company had not been focusing heavily on this advantage, Krispy Kreme Doughnuts had been making some sincere attempts to introduce healthier tags such as oatmeal, yoghurt and fruit juice into its menus. It is worth appreciating that the restaurant chain had proven effective to understand the massively increasing awareness of the common public towards the adverse effects of obesity.

Effective diversification into geographic regions

The reports of Krispy Kreme Doughnuts always prove to stand out with the advantage of good revenues from international markets. However it is also essential to be aware that the costs of expanding into new markets are continuously increasing and this had further led to a jump in the operating expenses of the company from $85.7 million to $93.8 million.

Though the earnings for the 2Q2013 would have missed out marginally on the estimates of the analysts, it is worth noting that the restaurant chain of Krispy Kreme Doughnuts presents bright prospects in the near future especially with its phenomenal growth in the sales of same stores and with its effective expansion into the international markets.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.