Krispy Kreme soars 40% on deal with McDonald's to sell its doughnuts nationwide

By Tomi Kilgore

Deal will double 'points of access' for Krispy Kreme, starting later this year

Shares of Krispy Kreme Inc. rocketed higher Tuesday, after the doughnut seller announced an expanded partnership with McDonald's Corp., in which its doughnuts will start becoming available at the fast-food giant's restaurants across the U.S.

The rollout of the partnership will begin in the second half of 2024, with Krispy Kreme doughnuts expected to be available nationwide by the end of 2026.

Krispy Kreme's stock (DNUT) soared 39.4% to $17.35, their highest point in more than two years, smashing the previous record one-day gain of 14.1% seen on Aug. 19, 2021.

McDonald's shares (MCD) were unchanged.

"The top request we receive from consumers, every day, is, 'please bring Krispy Kreme to my town,'" said Krispy Kreme Chief Executive Josh Charlesworth. "Partnering with McDonald's on a national scale will provide our fans and doughnut lovers unprecedented daily access to fresh doughnuts and the joy that is Krispy Kreme."

The company said the partnership is expected to more than double "points of access" for customers. It has been scaling its supply chain as it readies for the expansion.

As of the end of 2023, Krispy Kreme said it had 7,372 points of access in the U.S., while McDonald's had more than 13,449 restaurants in the U.S.

The rally in Krispy Kreme's stock has turned it positive for this year, as it has now gained nearly 15% in 2024, while McDonald's shares have shed about 5% and the S&P 500 index SPX has gained 9%.

-Tomi Kilgore

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03-26-24 1658ET

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