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 September 27, 2026 compared to the Quarter ended September 28, 2025

The following table presents our unaudited condensed consolidated results of operations for the quarter ended September 27, 2026 and the quarter ended September 28, 2025:

The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the quarter ended September 27, 2026 compared to the quarter ended September 28, 2025:

Total net revenue declined $46.5 million, or 12.4%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, primarily due to the $53.8 million reduction associated with refranchising efforts taken in the U.S. and International segments. 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. Organic revenue decreased by 0.1%, primarily driven by a decline in the International segment, mostly offset by growth in the Market Development and U.S. segments.

Our U.S. segment net revenue declined $55.3 million, or 25.6%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, primarily due to the $56.7 million reduction associated with the WKS refranchising. U.S. organic revenue increased by 0.9%, driven by growth in fresh delivery and digital.

Our International segment net revenue declined $16.8 million, or 12.0%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, due primarily to the impacts of the refranchising of Japan, partially offset by foreign currency translation impacts of $4.7 million. International organic revenue decreased by 5.4%, driven primarily by declines in the U.K., partially offset an increase in Canada.

Our Market Development segment net revenue increased $25.5 million, or 135.3%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, primarily due to the $17.6 million benefit from refranchisings in the first quarter of fiscal 2026. Market Development organic revenue increased by 14.0%, primarily due to an increase in royalty revenues primarily from the U.S., Middle East, Japan and Brazil.

Operating expenses: Operating expenses decreased $44.7 million, or 22.8%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, driven mainly by a decrease of $25.5 million in shop labor expenses related to the lower staffing levels and reduced labor requirements in connection with our turnaround plan, coupled with an $8.5 million decrease in costs associated with the transition to third-party logistics, $5.6 million in costs associated with the refranchising transactions completed in the first quarter of fiscal 2026, with the remaining decrease attributable to operating efficiencies. Operating expenses as a percentage of revenue decreased by 620 basis points, from 52.2% in the third quarter of fiscal 2025 to 46.0% in the third 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 increased $5.2 million, or 10.6%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, driven primarily by a $4.0 million increase in share-based compensation expense coupled with a $2.6 million increase in employee costs, partially offset by a $1.4 million decrease in marketing fees. SG&A as a percentage of revenue, increased by 340 basis points, from 13.2% in the third quarter of fiscal 2025 to 16.6% in the third quarter of fiscal 2026.

Other expense/(income), net: Other expense/(income), net increased $12.4 million, or 126.3%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, primarily driven by $9.3 million of business interruption insurance recoveries in the third quarter of fiscal 2025 related to the 2024 Cybersecurity Incident. Other expense/(income), net of $2.6 million in the third quarter of fiscal 2026 primarily reflected approximately $1.5 million of other non-core operating expenses and approximately $0.5 million of losses on disposal of fixed assets. Other expense/(income), net of $(9.8) million in the third quarter of fiscal 2025 was primarily related to the cybersecurity recovery referred to above. As a percentage of revenue, other expense/(income), net increased 340 basis points, from (2.6)% in the third quarter of fiscal 2025 to 0.8% in the third quarter of fiscal 2026.

Depreciation and amortization expense: Depreciation and amortization expense decreased $6.7 million, or 20.1%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, primarily driven by lower finance lease amortization expense and fixed asset impairments taken in the third quarter of fiscal 2026. As a percentage of revenue, Depreciation and amortization expense decreased 80 basis points, from 8.9% in the third quarter of fiscal 2025 to 8.1% in the third quarter of fiscal 2026.

Interest expense, net: Interest expense, net decreased $3.2 million, or 19.4%, from the third quarter of fiscal 2025 to the third quarter of fiscal 2026, primarily driven by a lower average debt balance.

Income tax benefit: Income tax benefit was$8.9 million in thethird quarter of fiscal 2026, while income tax benefit was$2.8 million in the third quarter of fiscal 2025. The variancewas primarily driven by the tax effects of the mix of income and taxes attributable to foreign jurisdictions, and the release of previously accrued uncertain tax benefits.

Results of Operations by Segment – Quarter ended September 27, 2026 compared to the Quarter ended September 28, 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 decreased $7.1 million, or 34.0%, with margin decline of 110 basis points to 8.6% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025, primarily driven by the $9.3 million cybersecurity insurance recovery in the prior year third period and refranchising transactions completed in the first quarter of fiscal 2026. Excluding the $9.3 million of business interruption insurance recovery in the year ago period, U.S. Adjusted EBITDA increased $2.2 million, driven by increased profitability associated with our turnaround plan.

International segment Adjusted EBITDA decreased $3.1 million, or 13.2%, primarily due to refranchising of the Japan business. The margin decline of 20 basis points to 16.3% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 was due to margin declines in Australia-New Zealand and, to a lesser extent, the impact of the Japan refranchising, transaction partially offset by margin improvements in Canada.

Market Development segment Adjusted EBITDA increased $6.5 million, or 54.0%, primarily due to the WKS Refranchising and the Japan refranchising. Adjusted EBITDA margin declined 2,190 basis points to 41.6% in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025, driven by changes in the regional mix of increased lower-margin U.S. franchised sales, associated with the refranchising transactions.

Three Quarters ended September 27, 2026 compared to the Three Quarters ended September 28, 2025

The following table presents our unaudited condensed consolidated results of operations for the three quarters ended September 27, 2026 and the three quarters ended September 28, 2025:

The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the three quarters ended September 27, 2026 compared to the three quarters ended September 28, 2025:

Total net revenue declined $103.5 million, or 9.2%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026, primarily due to the $118.8 million reduction associated with refranchising efforts taken in the U.S. and International segments, partially offset by an increase in royalty revenue. Organic revenue declined $10.6 million, or 1.0%, primarily driven by lower Doughnut Shop transaction volume impacted by consumer softness in a challenging macroeconomic environment.

Our U.S. segment net revenue declined $127.7 million, or 18.7%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026, primarily due to the refranchising efforts in fiscal 2026. U.S. organic revenue declined $7.6 million, or 1.4%, primarily driven by lower Doughnut Shop transaction volume impacted by consumer softness in a challenging macroeconomic environment. The organic revenue decline was also driven by Points of Access decline of 813, or 11.2%, impacted by the strategic closure of underperforming fresh delivery doors.

Our International segment net revenue declined $26.6 million, or 6.8%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026, driven by the $36.5 million impact of the Japan refranchising transaction in fiscal 2026. International organic revenue declined $12.2 million, or 3.4%, driven primarily by declines in the U.K, Australia-New Zealand and Mexico.

Our Market Development segment net revenue increased $50.8 million, or 92.7%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026, primarily due to the $37.7 million impact of refranchising transactions in fiscal 2026. Market Development organic revenue increased $9.2 million, or 10.0%, primarily driven by an increase in royalty revenues.

Operating expenses: Operating expenses decreased $107.3 million, or 17.7%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026, driven mainly by a decrease of $63.8 million in shop labor expenses related to the lower staffing levels and reduced labor requirements in connection with our turnaround plan, coupled with a $17.7 million decrease in costs associated with the transition to third-party logistics, $12.0 million in costs associated with the refranchising transactions completed in the first quarter of fiscal 2026, with the remaining decrease of $13.9 million attributable to operational efficiencies. Operating expenses as a percentage of revenue decreased 510 basis points, from 53.6% in the first three quarters of fiscal 2025 to 48.5% in the first three quarters of fiscal 2026, primarily due to operational efficiencies associated with our turnaround plan.

Selling, general and administrative expense: SG&A expense decreased $5.4 million, or 3.1%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026, driven mainly by a $6.9 million reduction in legal professional fees, coupled with a $1.1 million reduction in insurance costs, partially offset by an increase in bad debt expense of $2.7 million. As a percentage of revenue, SG&A expense increased 100 basis points, from 15.2% in the first three quarters of fiscal 2025 to 16.2% in the first three quarters of fiscal 2026.

Goodwill and other asset impairments: Goodwill and other asset impairments of $12.5 million for the first three quarters of fiscal 2026 consists primarily of truck impairments resulting from the transition to third-party logistics. Goodwill and other asset impairments of $411.9 million in the first three quarters of fiscal 2025, is driven by the $356.0 million non-cash goodwill impairment charge, coupled with a $26.7 million non-cash long-lived asset impairment charge and non-cash lease impairment and termination costs of $29.2 million in the first three quarters of fiscal 2025.

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 for further information.

Other expense/(income), net: Other expense/(income), net of $4.4 million in the first three quarters of fiscal 2026 primarily reflected approximately $2.0 million of other non-core operating expenses and approximately $2.0 million of losses on disposal of fixed assets. Other expense/(income), net of $(16.9) million in the first three quarters of fiscal 2025 was primarily related to $9.3 million of business interruption insurance recoveries related to the 2024 Cybersecurity Incident and gains on sale-leaseback transactions as described in Note 6, Leases, to the Condensed Consolidated Financial Statements. As a percentage of revenue, other expense/(income), net increased 190 basis points, from (1.5)% in the first three quarters of fiscal 2025 to 0.4% in the first three quarters of fiscal 2026.

Depreciation and amortization expense: Depreciation and amortization expense decreased $17.3 million, or 16.8%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026. As a percentage of revenue, Depreciation and amortization expense decreased 70 basis points, from 9.1% in the first three quarters of fiscal 2025 to 8.4% in the first three quarters 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.

Interest expense, net: Interest expense, net decreased $7.1 million, or 14.3%, from the first three quarters of fiscal 2025 to the first three quarters of fiscal 2026, primarily driven by a lower average debt balance.

Loss on divestiture of Insomnia Cookies: In the first three quarters of fiscal 2025, we sold the remainder of our ownership interest in Insomnia Cookies for cash proceeds and recognized a loss on divestiture of $11.5 million (gross of income taxes) with no comparable activity in the first three quarters of fiscal 2026.

Income tax benefit: Income tax benefit was $9.5 million in the first three quarters of fiscal 2026, while income tax benefit was $25.9 million in the first three quarters of fiscal 2025. The variance was primarily driven by the WKS Refranchising and the refranchising of Japan and an increase in pre-tax results in the first three quarters of fiscal 2026.

Results of Operations by Segment – Three Quarters ended September 27, 2026 compared to the Three Quarters ended September 28, 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 $6.3 million, or 13.5%, primarily driven by increased operational efficiencies. The margin increase of 270 basis points to 9.6% in the first three quarters of fiscal 2026 compared to the first three quarters of fiscal 2025 was primarily driven by increased operational efficiencies across operating expenses and SG&A associated with our turnaround plan.

International segment Adjusted EBITDA decreased $7.5 million, or 13.4%, with margin decline of 100 basis points to 13.3% in the first three quarters of fiscal 2026 compared to the first three quarters of fiscal 2025, due primarily to our Japan refranchising.

Market Development segment Adjusted EBITDA increased $17.5 million, or 54.7%, impacted by refranchising transactions in fiscal 2026. The margin decrease of 1,150 basis points to 46.9% in the first three quarters of fiscal 2026 compared to the first three quarters of fiscal 2025 was driven mainly by changes in the regional mix of increased lower-margin U.S. refranchised sales, associated with the WKS Refranchising and the Japan refranchising.

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 September 27, 2026, the principal amount outstanding under our 2023 Facility was $813.9 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 for further information.

We had cash and cash equivalents of $30.3 million and $42.4 million as of September 27, 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 and 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 $18.7 million for the first three quarters of fiscal 2026, a fluctuation of $29.8 million compared with the first three quarters 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 $55.9 million for the first three quarters of fiscal 2026, an increase of $52.4 million compared with the first three quarters of fiscal 2025. The cash provided by investing activities in the first three quarters of fiscal 2026 was primarily due to the refranchising transactions discussed in Note 3, Acquisitions and Divestitures, to the Condensed Consolidated Financial Statements, partially offset by the settlement of the liability to KK Canada discussed in Note 18, Redeemable Noncontrolling Interests, to the Condensed Consolidated Financial Statements, and 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 $86.8 million for the first three quarters of fiscal 2026, a fluctuation of $99.2 million compared with the first three quarters 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.

Debt

Our long-term debt obligations consist of the following:

2023 Secured Credit Facility

As of September 27, 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 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 4.2 to 1.00 as of the end of the third 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 September 27, 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%.