Krispy Kreme, Inc.

Results of Operations

The following comparisons are historical results and are not indicative of future results, which could differ materially from the historical financial information presented.

Quarter ended March 29, 2026 compared to the Quarter ended March 30, 2025

The following table presents our unaudited condensed consolidated results of operations for the quarter ended March 29, 2026 and the quarter ended March 30, 2025:

The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the quarter ended March 29, 2026 compared to the quarter ended March 30, 2025:

Total net revenue declined $8.2 million, or approximately 2.2%, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to the $9.1 million reduction associated with refranchising efforts taken in the U.S. and International segments. Organic revenue decreased by approximately 2.6%, primarily driven by a decline in both the U.S. and Market Development, partially offset by growth in the International segment. The organic revenue decrease reflects a Global Points of Access decline of 2,857, or 15.9%, primarily impacted by the strategic closure of underperforming fresh delivery doors, including those associated with the termination of the Business Relationship Agreement with McDonald’s USA.

Our U.S. segment net revenue declined $15.0 million, or approximately 6.3%, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to the $5.9 million reduction associated with refranchising of the U.S. business and the strategic closure of underperforming fresh delivery doors. U.S. organic revenue declined by approximately 4.0%, primarily driven by the strategic closure of underperforming fresh delivery doors, including those associated with the termination of the Business Relationship Agreement with McDonald’s USA.

Our International segment net revenue increased $5.6 million, or approximately 4.7%, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, aided byforeign currency translation impacts of $10.5 million, partially offset by the refranchising of Japan. International organic revenue grew by approximately 0.4%, driven primarily by strength in Canada and Mexico.

Our Market Development segment net revenue increased $1.2 million, or approximately 6.4%, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to the $2.1 million benefit from refranchising in the first quarter of fiscal 2026 (the results of refranchised businesses are reported within the U.S. or International segments, as applicable, prior to the respective dates of divestiture, and are reported within the Market Development segment, following the respective dates of divestiture). Market Development organic revenue declined by approximately 4.3%, as growth in royalty revenue from certain international franchise markets was more than offset by lower franchisee product sales and less shipments of equipment to franchisees.

Operating expenses: Operating expenses decreased $10.7 million, or 5.4%, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, driven mainly by an increase in operational efficiencies. Operating expenses as a percentage of revenue decreased by approximately 170 basis points, from 53.0% in the first quarter of fiscal 2025 to 51.3% in the first quarter of fiscal 2026, primarily due to increased operational efficiencies as we continue to deliver on our turnaround plan.

Selling, general and administrative expense: Selling, general and administrative (“SG&A”) expense decreased $1.4 million, or 2.3%, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026. As a percentage of revenue, SG&A expense remained consistent with the comparable period.

Gain on refranchising, net: In the first quarter of fiscal 2026, the Company completed two refranchising transactions, one each impacting the U.S. and International business segments resulting in a net gain of $8.9 million. Refer to Note 3, Acquisitions and Divestitures to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q for further information.

Depreciation and amortization expense: Depreciation and amortization expense decreased $1.8 million, or 5.3%, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026. As a percentage of revenue, Depreciation and amortization expense decreased approximately 30 basis points, from 9.0% in the first quarter of fiscal 2025 to 8.7% in the first quarter of fiscal 2026, primarily driven by lower finance lease amortization expense and fixed asset impairments taken in the second quarter of fiscal 2025 following the termination of the Business Relationship Agreement with McDonald’s USA.

Income tax (benefit)/expense: Income tax expense was$3.6 million in the first quarter of fiscal 2026, while income tax benefit was$2.7 million in the first quarter of fiscal 2025. The variancewas primarily driven by the refranchising of W.K.S. Krispy Kreme and Krispy Kreme Japan and an increase in pre-tax results in thefirst quarter of fiscal 2026.

Results of Operations by Segment – Quarter ended March 29, 2026 compared to the Quarter ended March 30, 2025

The following table presents Adjusted EBITDA by segment for the periods indicated:

(1) Refer to “Key Performance Indicators and Non-GAAP Measures” above for a reconciliation of Adjusted EBITDA to net loss.

U.S. segment Adjusted EBITDA increased $9.6 million, or 60.6%, with margin expansion of 480 basis points to 11.5% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, primarily driven by productivity initiatives, SG&A savings, and the removal of costs following the termination of the Business Relationship Agreement with McDonald’s USA.

International segment Adjusted EBITDA decreased $0.4 million, or 2.9%, primarily due to refranchising of the Japan business. The margin decline of 90 basis points to 11.6% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, was due to lower Adjusted EBITDA in Australia and Canada.

Market Development segment Adjusted EBITDA increased $0.6 million, or 5.3%, with margin decline of 60 basis points to 57.5% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, driven mainly by changes in the regional mix of product sales.

Capital Resources and Liquidity

Our principal sources of liquidity to date have included cash from operating activities, cash on hand, amounts available under our credit facility, commercial trade financing including our structured payables programs, and proceeds from strategic transactions. Our primary use of liquidity is to fund the cash requirements of our business operations, including working capital needs, capital expenditures, acquisitions, and other commitments.

Our future obligations primarily consist of our debt and lease obligations, as well as commitments under ingredient and other forward purchase contracts. As of December 28, 2025, we had the following future obligations:

•An aggregate principal amount of $900.3 million outstanding under the 2023 Facility;

•An aggregate principal amount of $2.5 million outstanding under short-term, uncommitted lines of credit;

•Non-cancellable future minimum operating lease payments totaling $641.6 million;

•Non-cancellable future minimum finance lease payments totaling $92.8 million; and

•Purchase commitments under ingredient and other forward purchase contracts of $74.0 million.

As of March 29, 2026, the principal amount outstanding under our 2023 Facility was $827.4 million. The decrease from the 2023 Facility balance as of December 28, 2025 was primarily driven by proceeds from the refranchising transactions completed in the first quarter of fiscal 2026 which were used to pay down debt. Refer to Note 10, Long-Term Debt to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q for further information.

We had cash and cash equivalents of $74.2 million and $42.4 million as of March 29, 2026 and December 28, 2025, respectively. We believe that our existing cash and cash equivalents and available borrowing capacity under our credit facilities discussed above will be sufficient to fund our operating and capital needs for at least the next twelve months. Our assessment of the period of time through which our financial resources will be adequate to support our operations could vary because of, and our future capital requirements will depend on, many factors, including our growth rate, the growth of our presence in new markets, and the expansion of our omni-channel model in existing markets. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, and financial condition would be adversely affected.

Dividend Policy

In line with our capital allocation priorities with our growth strategy, the Company does not currently pay cash dividends to holders of the Company’s common stock.

Cash Flows

We have historically generated cash from operations and have credit availability and capacity to fund operating and discretionary spending such as capital expenditures and debt repayments. Our requirement for working capital is not significant because our consumers pay us in cash or on debit or credit cards at the time of the sale and we are able to sell many of our inventory items before payment is due to the vendors for the various inputs to such items. The following table and discussion present, for the periods indicated, a summary of our key cash flows from operating, investing, and financing activities:

Operating Activities

Cash provided by operations totaled $20.2 million for the first quarter of fiscal 2026, a fluctuation of $41.0 million compared with the first quarter of fiscal 2025, primarily due to an increase in operational efficiencies as we continue to deliver on our turnaround plan.

Investing Activities

Cash provided by investing activities totaled $100.1 million for the first quarter of fiscal 2026, an increase of $125.9 million compared with the first quarter of fiscal 2025. The cash provided by investing activities in the first quarter of fiscal 2026 was primarily due to the refranchising transactions discussed in Note 3, Acquisitions and Divestitures to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q, partially offset by cash for capital expenditures. As part of our turnaround plan, we expect to reduce capital investment by using existing assets and focusing on franchise development.

Financing Activities

Cash used for financing activities totaled $88.1 million for the first quarter of fiscal 2026, a fluctuation of $124.9 million compared with the first quarter of fiscal 2025, primarily driven by the repayment of long term debt balances with a portion of the net proceeds received from the refranchising transactions discussed in Note 3, Acquisitions and Divestitures to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q.

Debt

Our long-term debt obligations consist of the following:

2023 Secured Credit Facility

As of March 29, 2026, the 2023 Facility consisted of a $300.0 million senior secured revolving credit facility and a term loan with an original principal amount of $700.0 million. During the second quarter of fiscal 2025, the Company amended the 2023 Facility to, among other things, establish additional, incremental term loan commitments in an aggregate principal amount of $125.0 million. Refer to Note 10, Long-Term Debt to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q for further information.

Under the terms of the 2023 Facility, we are subject to a requirement to maintain a leverage ratio of less than 5.00 to 1.00 as of the end of each quarterly Test Period (as defined in the 2023 Facility) through maturity in March 2028. The leverage ratio under the 2023 Facility is defined as the ratio of (a) Total Indebtedness (as defined in the 2023 Facility, which includes all debt and finance lease obligations) minus unrestricted cash and cash equivalents to (b) a defined calculation of Adjusted EBITDA (2023 Facility Adjusted EBITDA) for the most recently ended Test Period. Our leverage ratio was 3.9 to 1.00 as of the end of the first quarter of fiscal 2026 compared to 4.4 to 1.00 as of the end of fiscal 2025.

We were in compliance with the financial covenants related to the 2023 Facility as of March 29, 2026. If we are unable to meet the 2023 Facility financial or other covenants in future periods, it could limit our ability to draw on the revolving credit facility, could result in the lenders accelerating the maturity of such indebtedness and foreclosing upon the collateral pledged thereunder, and could require the replacement of the 2023 Facility with new sources of financing, which we may be unable to secure on favorable terms or at all, any of which could negatively impact our liquidity.

Short-Term Lines of Credit

We are party to two agreements with existing lenders providing for short-term, uncommitted lines of credit up to an aggregate of $25.0 million. Borrowings under these short-term lines of credit are payable to the lenders on a revolving basis for tenors up to three months and are subject to an interest rate of adjusted term SOFR plus a credit spread adjustment of 0.10% plus a margin of 1.75%.