ICR CONFERENCE

01.13.2016

FORWARD-LOOKING STATEMENTS
Some of the information in this presentation represents forward-looking statements that are
protected under the Private Securities Litigation Reform Act of 1995. Such statements may
reflect our expectations or beliefs about the future, including, without limitation, expectations
or beliefs regarding our financial performance. We cannot assure you that we will achieve or
realize these expectations.
Like any such statements, they are subject to a number of factors, risks and uncertainties that
could cause actual results to differ materially from our expectations or beliefs. These factors
include items discussed in our SEC filings, including our annual report on Form 10-K for the
year ended February 1, 2015. New factors emerge from time to time, and it is not possible for
us to predict all such factors or assess the impact of each such factor on Krispy Kreme.
If we do make forward-looking statements, we undertake no obligation to update those
statements in the future in light of subsequent events. Please note that all of our SEC filings,
along with other shareholder relevant information, can be found on the IR portion of our
website at www.krispykreme.com.

Our Mission Statement

Who We Are

Global brand w/over 1,100 locations in

25 countries
$1.3 billion in systemwide sales
Indulgent treat vs. meal replacement
Dozens based business
80% of our business is doughnuts
Average ticket of approximately $7.75
Daypart transactions are evenly spread
throughout the day

Where We Are
1,116 locations in 25 countries as of December 27, 2015
18

62

300

20
6

142

67
13
3 1
114 1
21

33

129
5
76

22
13
8
15

25

We Operate 4 Unique Business Segments (1)

COMPANY STORES (120)
Revenues of $346mm: ~55/45 Retail/CPG

INTERNATIONAL FRANCHISE (816)

Systemwide sales of $485mm
Revenues of $28mm

DOMESTIC FRANCHISE (180)

Systemwide sales of $354mm
Revenues of $15mm

SUPPLY CHAIN
Gross revenues of $254mm
External revenues of $125mm

[1] Systemwide sales and revenues

represent ttm ending Nov. 1, 2015; store
count as of December 27, 2015.

Our Business Strategy Revolves Around 4 Pillars

ACCELERATING
GLOBAL
GROWTH

LEVERAGING
TECHNOLOGY

ENHANCING
CORE MENU

MAXIMIZING
BRAND
AWARENESS

We Continue to Grow Both Domestically & Internationally

Domestic
60/40 Franchise vs. Company-Owned
Opening 30 shops/year
Long-term potential for an additional 900 to 1,200
drive thru locations plus non-traditional locations

International
Ongoing annual double-digit growth %
Opening 100 net new shops/year
Currently in 25 countries and targeting 5 to 7 new countries/year
ACCELERATING
GLOBAL
GROWTH

Glasgow, Scotland

We Are Intensely Focused on Consistently Driving Comp Sales

Balance promotion with profitability
Special event days vs. everyday
promotions
Leverage social media
Exciting limited time offers (LTOs)
Tiered/Premium pricing
Increase coffee attachment rates
Leverage guest engagement platform
Opportunistic pricing actions
ACCELERATING
GLOBAL
GROWTH

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ACCELERATING
GLOBAL
GROWTH

11

Doughnuts and Coffee

First Priority: Accelerate attachment
Order flow and operational improvements
Making coffee part of our cultural DNA

Longer Term: Design into

our shops
Stronger visual and sensory signals
Warmer, more inviting environment

ACCELERATING
GLOBAL
GROWTH

12

Coffee New Prototype Shop

ACCELERATING
GLOBAL
GROWTH

13

The Focus is Enhancing the Overall Guest Experience

ACCELERATING
GLOBAL
GROWTH

14

including More Inviting Atmosphere & Seating

ACCELERATING
GLOBAL
GROWTH

15

Enhanced Customer Ordering Process & Flow

Current

Future

16

Our Loyalty Program is in Place

Mobile
GUEST
ENGAGEMENT
Platform
LEVERAGING
TECHNOLOGY

Hot Light Feature

Find favorite or nearby shop
Receive notifications for Hot Light

Digital Rewards

Simple program
Dashboard of reward status
Current promotions
Stored value
Ability to gift

MOBILE GUEST
ENGAGEMENT

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and We Are Making Headway on Analytics

POS
Rolling out common platform to all
domestic locations by end of January

Business Analytics
Making strong progress with dashboards
and data mining
Real-time analytics = action

LEVERAGING
TECHNOLOGY

BUSINESS

ANALYTICS

18

We Continue Enhancing our Menu

Short Term

Emphasis on coffee
Doughnut variety
Premium offerings, incl. tiered pricing
Engage millennials

Longer Term
Explore complementary platforms
Customization

ENHANCING
CORE MENU

19

And, We Continue to Leverage our Brand in Other Channels

CPG/Wholesale
Grocery/mass merchants &
convenience stores
Incremental business
Different use occasion

MAXIMIZING
BRAND
AWARENESS

Licensing

Coffee products are current focus

o
o

Top-of-mind awareness and trial

Increasing brand equity

Establishes national platform

Exploring longer shelf life
opportunities

FUNDRAISING
Enables local charities to raise more than $35 million
Uniquely positioned to expand through additional programs,
increased awareness and technology.

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FINANCIAL UPDATE

21

We Have Experienced Solid Financial Growth

Revenues ($s in millions)
$403

$427

$460

Company-owned Retail Same-store Sales

8.3%

$490
6.9%
6.2%

1.3%
FY12

FY13

FY14

FY15

FY12

FY13

FY14

FY15

FY13 excludes revenues for 53rd week

Adjusted EPS

Cash Flow from Operations ($s in millions)

$0.70

$0.61

$59

$57

FY13

FY14

$63

$0.47
$34

$0.31

FY12

FY13

FY14

FY15

Adjusted EPS is a non-GAAP measure

FY12

FY15

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We Have Used Excess Cash Flow to Repurchase Stock

Consistently allocating capital to share repurchases to compliment organic growth
Since FY 2013 through FY16 Q3, we have repurchased $132 million worth of stock

$s repurchased in millions

$50

$39

$20

FY13

$23

FY14

FY15

FY16
Q3 YTD

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Driving New Shop Returns Continues to be a Focus

We have 35 company-owned small shops

On average, the returns are exceeding our cost of capital
We modified our site selection process
We continue to focus on enhancing returns:
o
o
o

Topline
Margins
Investment Cost

24

We Will Remain Disciplined With Our Capital

Growing at a rate that is right for us

Funding business growth with cash flow from operations
Use of capital expenditures to build new small retail
shops, remodel and maintain existing shops and invest in
technology
Returning excess capital through share repurchases
o

Repurchased $132mm of common stock since FY 2013

Maintain a prudent balance sheet

25

Summary

The KKD brand is much larger than the

company
We are growing shops at a low double digit
rate
We are intensely focused on further
improving our (and franchisee) returns
We have a number of initiatives to continue
driving comp sales
We are maintaining a prudent balance sheet,
while continuing to return significant capital
via share repurchases

APPENDIX

KRISPY KREME DOUGHNUTS, INC.

NON-GAAP FINANCIAL INFORMATION
As of February 1, 2015, the Company had net deferred income tax assets of approximately $92 million, of which approximately $44
million related to federal and state net operating loss carryovers. The Companys federal net operating loss carryovers totaled
approximately $159 million.
The Company has reported cumulative pretax income of over $160 million since the beginning of fiscal 2010, and the Company
also has generated significant taxable income during this period. However, because of the Companys utilization of its federal and
state net operating loss carryovers and other deferred tax assets, the Companys cash payments for income taxes have been
relatively insignificant during this period. As a result, the provision for income tax expense has substantially exceeded cash
payments for income taxes. Until such time as the Companys net operating loss carryovers are exhausted or expire, GAAP income
tax expense is expected to continue to substantially exceed the amount of cash income taxes payable by the Company.
The Company recorded a pretax charge of approximately $2.5 million in the fourth quarter of fiscal 2015 for the settlement of
amounts due under an employment agreement with the Companys former chief executive officer. That officer, who was most
recently the Companys Executive Chairman, transitioned from that role to the non-employee role of non-executive chairman of the
board of directors in late January 2015. Charges of this nature are not expected to recur on a regular basis.
The following non-GAAP financial information and related reconciliation of adjusted net income to GAAP net income are provided
to assist the reader in understanding the effects of the above facts and transactions on the Companys results of operations. In
addition, the non-GAAP financial information is intended to illustrate the material difference between the Companys income tax
expense and income taxes currently payable. These non-GAAP performance measures are consistent with other measurements
made by management in the operation of the business which do not consider income taxes except to the extent to which those taxes
currently are payable, for example, capital allocation decisions and incentive compensation measurements that are made on a pretax
basis.

27

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KRISPY KREME
DOUGHNUTS, INC.
NON-GAAP FINANCIAL
INFORMATION
Net income (loss), as reported.................................................

Historical Periods
Year Ended

Year Ended

Year Ended

Year Ended

January 29,

February 3,

February 2,

February 2,

2012

2013

2014

2015

(In thousands, except per share amounts)

166,269

20,779

34,256

Charge for settlement of employment contract....................

30,060
2,464

Loss on refinancing of debt......................................................

967

Gain on sale of interest in KK Mexico

(net of income taxes of $1,492).............................................

(4,706)

Earnings for the 53rd week.....................................................

Provision for deferred income taxes......................................

Adjusted net income (loss).......................................................

(139,403)

(1,273)

13,413

8,014

15,729

22,160

32,919

43,237

48,253

Basic............................................................................

0.32

0.49

0.64

0.73

Diluted.........................................................................

0.31

0.47

0.61

0.70

Adjusted earnings (loss) per common share:

Weighted average shares outstanding:

Basic............................................................................

69,145

67,624

67,261

66,360

Diluted.........................................................................

71,497

69,896

71,054

68,929

The Companys fiscal year ends on the Sunday closest to January 31, which periodically results in a 53-week year. Fiscal 2013 contained 53 weeks.