Novice Investing - Krispy Kreme Still Sour?

Date: Tuesday 13th 2008f May 2008 07:25:05 AM

Krispy Kreme Still Sour? - 02/13/2006

By: Novice Investing Staff

We last talked about Krispy Kreme one year ago. At the time, it just missed its 15th December 2004 deadline for filing its quarterly 10Q. A year later, has things turned for the doughnut maker? Unfortunately, it is not. Shareholders shouldn't be surprised if the share hovered near its all time low. Nobody gets away by filing its financial statement late.

The latest news from the company does not indicate that things are going to turn better soon. A Houston franchisee has decided to end its partnership with Krispy Kreme . To add insult to injury, the franchisee will in turn open another Doughnot franchise called Jumbles Dough Factory.

How things has changed. A couple of years ago, Krispy Kreme is the company to love. Now, it is the company that people love to hate. Looking at Yahoo! Finance, it seems that the company has not changed. What do we mean by that? Take a look at the latest financial statement from the company. Whoops. There is NO latest financial statement released by the company. If you look at the balance sheet, the latest quarterly report came on August 2004 which is a couple of months before the company missed its December 2004 deadline. Furthermore, the company has admitted to restate the financial release a few quarters before that. And, it hasn't lived up to its promise, thus far.

This is still the company to avoid, in our opinion. With no latest information available, buying this company is akin to buying a lottery ticket. Who knows what the number would be? Sure, you can argue that by the time the company releases its financial statement, the stock price would have gone up already. Us? We prefer to wait it all up. The past year has shown that Krispy Kreme management has not lived up to its expectations. What took them so long? Is it possible that more skeletons will be found under the closet? At this point, it looks like it.


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Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding Krispy Kreme Doughnuts Inc. (KKD) or any other securities.

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