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Krispy Kreme, Inc. (DNUT)

CIK: 0001857154. SIC: 5400 Retail-Food Stores. Latest 10-K as of: 2026-03-06.

SIC breadcrumb: Retail Trade > SIC Major Group 54 > SIC 5400 Retail-Food Stores

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1857154. Latest filing source: 0001857154-26-000015.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue1,522,616,000USD20252026-03-06
Net income-515,767,000USD20252026-03-06
Assets2,592,959,000USD20252026-03-06

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001857154.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric201920212022202320242025
Revenue959,408,0001,122,036,0001,384,391,0001,686,104,0001,665,397,0001,522,616,000
Net income-37,409,000-64,301,000-24,506,000-37,925,0003,095,000-515,767,000
Operating income37,999,0004,280,00041,102,00013,145,000-8,735,000-469,270,000
Diluted EPS-0.30-0.52-0.18-0.230.02-3.04
Operating cash flow80,812,00028,675,000141,224,00045,544,00045,832,00033,924,000
Capital expenditures76,373,00097,826,000119,497,000121,427,000120,792,00097,929,000
Dividends paid2,629,00042,00048,187,00023,558,00023,692,00011,934,000
Share buybacks0.000.00139,103,0001,880,0005,489,0001,350,000
Assets3,060,995,0003,145,254,0003,240,592,0003,072,030,0002,592,959,000
Liabilities2,212,636,0001,809,599,0001,976,809,0001,907,598,0001,915,998,000
Stockholders' equity684,684,0001,231,589,0001,169,683,0001,134,537,000650,123,000
Cash and cash equivalents35,373,00037,460,00038,562,00038,185,00028,962,00042,390,000
Free cash flow4,439,000-69,151,00021,727,000-75,883,000-74,960,000-64,005,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric201920212022202320242025
Net margin-3.90%-5.73%-1.77%-2.25%0.19%-33.87%
Operating margin3.96%0.38%2.97%0.78%-0.52%-30.82%
Return on equity-9.39%-1.99%-3.24%0.27%-79.33%
Return on assets-2.10%-0.78%-1.17%0.10%-19.89%
Liabilities / equity3.231.471.691.682.95
Current ratio0.330.300.330.360.38

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001857154.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2022-Q22022-07-03-0.02reported discrete quarter
2022-Q32022-10-02-0.08reported discrete quarter
2023-Q12023-04-020.00reported discrete quarter
2023-Q22023-07-02408,882,000223,0000.00reported discrete quarter
2023-Q32023-10-01407,367,000-40,457,000-0.24reported discrete quarter
2023-Q42023-12-31450,905,0002,610,000derived Q4 = FY annual - nine-month YTD
2024-Q12024-03-31442,698,000-8,534,000-0.05reported discrete quarter
2024-Q22024-06-30438,809,000-5,491,000-0.03reported discrete quarter
2024-Q32024-09-29379,867,00039,563,0000.23reported discrete quarter
2024-Q42024-12-29404,023,000-22,443,000derived Q4 = FY annual - nine-month YTD
2025-Q12025-03-30375,184,000-33,284,000-0.20reported discrete quarter
2025-Q22025-06-29379,767,000-435,260,000-2.55reported discrete quarter
2025-Q32025-09-28375,298,000-19,444,000-0.11reported discrete quarter
2025-Q42025-12-28392,367,000-27,779,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-29367,034,000-22,784,000-0.16reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001857154-26-000029.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-29.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”), as well as our audited Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K, and in other reports filed subsequently with the U.S. Securities and Exchange Commission (“SEC”).

Cautionary Note Regarding Forward-Looking Statements

Certain information included in this Form 10-Q is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, and involves risks, assumptions, and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements can be identified by use of forward-looking terminology, including terms such as “plan,” “believe,” “may,” “continue,” “could,” “will,” “should,” “would,” “anticipate,” “attempt,” “estimate,” “expect,” “intend,” “objective,” “seek,” “pursue,” “strive,” or, the negatives of these words, comparable terminology, or other references to future periods; however, statements may be forward-looking whether or not these terms or their negatives are used. Forward-looking statements are not a representation by us that the future plans, estimates, or expectations contemplated by us will be achieved. Our actual results could differ materially from the forward-looking statements included herein. We consider the assumptions and estimates on which forward-looking statements are based to be reasonable, but they are subject to various risks and uncertainties relating to our operations, financial results, financial conditions, business, prospects, future plans and strategies, projections, liquidity, the economy, and other future conditions. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors could cause our actual results to differ materially from those contained in forward-looking statements including, without limitation: food safety issues, including risks of food-borne illnesses, tampering, contamination, and cross-contamination; impacts from any material failure, inadequacy, or interruption of our information technology systems, including breaches or failures of such systems or other cybersecurity or data security-related incidents; our ability to execute our business strategy, including our turnaround plan and growth through international development with strategic partners and profitable expansion of our fresh delivery and digital channels; our ability to realize the anticipated benefits from past or potential future strategic transactions (including refranchising); failure by our franchisees, subfranchisees, or third-party service providers to operate effectively and in compliance with our standards and applicable law; any harm to our reputation or brand image; negative impacts on our business due to changes in consumer spending habits, consumer preferences, or demographic trends; our ability to open new and maintain existing shops and points of access both domestically and internationally; disruptions to our and our franchisees’ supply chain, including the loss of or failure to perform by single-source or limited suppliers, vendors, distributors, or manufacturers; our significant indebtedness and our ability to meet the financial and other covenants under our credit facilities; changes in the cost of raw materials and fuel or other commodities, including due to import and export requirements (including tariffs), inflation, fluctuations in foreign exchange rates, or heightened geopolitical tensions (including the recent Iran conflict); our ability to recruit and retain key personnel; failure to develop or maintain effective internal control over financial reporting or disclosure controls and procedures; adverse regulatory actions or publicity concerning food or occupational safety, food quality, health, and other issues or regulatory investigations, enforcement actions, or material litigation; and other risks and uncertainties described under the heading “Risk Factors” and elsewhere in our Annual Report on Form 10-K, filed by us with the SEC and in other filings we make from time to time with the SEC. These forward-looking statements are made only as of the date of this document, and we undertake no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future events, or otherwise, except as may be required by law.

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Overview

We believe Krispy Kreme is one of the most beloved and well-known sweet treat brands in the world. Krispy Kreme operates in more than 40 countries through its unique network of shops (“Doughnut Shops”), partnerships with leading retailers, and growing digital business. Our purpose is to touch and enhance lives through the joy that is Krispy Kreme. We are an omni-channel business that focuses on fresh, high-quality doughnuts with 15,125 points of access globally as of the end of the first quarter of fiscal 2026. We refer to the points of access where consumers can purchase our doughnuts as our “Global Points of Access” or, when referring to points of access in a particular region or segment, “Points of Access.” We sell doughnuts to consumers through three main channels: (1) Hot Light Theater Shops and Fresh Shops, (2) fresh delivery, and (3) digital.

The following table presents a summary of our financial results for the periods presented:

Quarter Ended

(in thousands, except percentages)

March 29, 2026

March 30, 2025

% Change

Net Revenues (1)

$

367,034 

$

375,184 

(2.2)

%

Net Loss

(22,673)

(33,405)

32.1 

%

Net Loss Attributable to Krispy Kreme, Inc.

(22,784)

(33,284)

31.5 

%

Adjusted Net Loss, Diluted (2)

(7,780)

(8,840)

12.0 

%

Adjusted EBITDA (2)

$

33,096 

$

23,980 

38.0 

%

(1)Organic revenue decline was 2.6% in the quarter ended March 29, 2026. Refer to “Results of Operations” below for more information on and the calculation of organic revenue growth/(decline).

(2)Refer to “Key Performance Indicators and Non-GAAP Measures” below for more information as to how we define and calculate Adjusted EBITDA and Adjusted Net Income/(Loss), Diluted and for a reconciliation of Adjusted EBITDA and Adjusted Net Income/(Loss), Diluted to the most comparable measure calculated under GAAP.

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Significant Events and Transactions

Our Turnaround Plan

The Company’s comprehensive turnaround plan, announced in August 2025, is designed to deleverage the balance sheet and deliver sustainable, profitable growth. The four components of the plan and certain progress made on each component are as follows:

•Refranchising: Improve financial flexibility through pursuit of opportunities to refranchise certain international equity markets. In the first quarter of fiscal 2026, we restructured our consolidated subsidiary in the western U.S., W.K.S. Krispy Kreme, to a minority ownership interest and completed the previously announced transaction to sell our operations in Japan;

•Improving return on invested capital: Reduce capital intensity by using existing assets and focusing on franchise development. During the first quarter of fiscal 2026 capital expenditures decreased by $17 million when compared to the first quarter of 2025, and we expect to continue to reduce capital investment in fiscal 2026 compared to fiscal 2025. We are also making selective, capital-light investments in geographies which currently have limited access to our products or where we have insufficient production to meet demand. This includes opening in new international franchise markets such as the Company’s planned entry into the Netherlands in late 2026 as announced in the first quarter of 2026;

•Expanding profit margins: Expand profit margins through greater operational efficiency. During the first quarter of fiscal 2026, we focused on making doughnuts more efficiently through optimizing production, streamlining Hub activities, and improving labor productivity. In addition, we are focused on delivering fresh doughnuts more efficiently through outsourcing U.S. logistics and improving route management and demand planning, and through optimizing production and delivery schedules to support cost-effective expansion. During the first quarter, we continued to outsource some of our U.S. fresh deliveries to 3PL carriers, and we completed the transition to 3PL carriers during the second quarter of fiscal 2026; and

•Driving sustainable, profitable growth: Pursue U.S. growth based upon sustainable and profitable revenue streams. During the first quarter of fiscal 2026, we added 276 profitable fresh delivery doors with strategic partners. In fiscal 2025, we closed underperforming fresh delivery doors, resulting in our Global Points of Access of 15,125 representing a decrease of 15.9% compared to the first quarter of fiscal 2025, primarily driven by the strategic closure of underperforming fresh delivery doors including the exit of McDonald’s USA doors in the third quarter of fiscal 2025 discussed below.

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Digital, Brand, and Innovation

We continue to prioritize expanding our digital channel sales, which grew in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. Growth in our digital channel is due to improvements in our branded digital platform as well as increasing product availability through third party digital channels, including delivery apps and our customers’ digital platforms. Innovation is also a significant driver of frequency as we create promotions and products that attract media outlets to our brand across our Global Points of Access. Additionally, we deliver new product experiences that align with seasonal and trending consumer and societal interests and create positive connections through simple, frequent, brand-focused offerings that encourage shared experiences. During the first quarter of fiscal 2026, we delivered the joy that is Krispy Kreme by spotlighting our core offerings such as the Original Glazed doughnut, supplemented by specialty doughnut offerings and seasonal activations, including Chocomania, Valentines, and many others around the world.

Termination of the Business Relationship Agreement with McDonald’s USA

On June 24, 2025, we and McDonald’s USA announced that our companies jointly decided to terminate the Business Relationship Agreement effective July 2, 2025, resulting in the reduction of approximately 2,400 fresh delivery doors in the third quarter of fiscal 2025. We worked to quickly remove costs related to the McDonald’s USA partnership which we expect to continue positively impacting profitability trends for our U.S. segment in the first half of fiscal 2026. Refer to Note 1, Description of Business and Summary of Significant Accounting Policies to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Form 10-Q for further information.

2024 Cybersecurity Incident

As previously disclosed, during the fourth quarter of fiscal 2024, unauthorized activity on a portion of our information technology systems resulted in our experiencing certain operational disruptions, including with online ordering in parts of the U.S. (the “2024 Cybersecurity Incident”). We incurred losses and costs from the incident, primarily in the fourth quarter of fiscal 2024 and early in the first quarter of fiscal 2025. We hold cybersecurity insurance which offset a portion of the losses and costs from the incident. The investigation of the 2024 Cybersecurity Incident was substantially completed in the second quarter of fiscal 2025.

Tariffs, Global Trade, and Geopolitical Uncertainty

The

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-06. Report date: 2025-12-28.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our audited Consolidated Financial Statements and related notes included elsewhere in this Annual Report. This section of the Annual Report generally discusses fiscal 2025 and fiscal 2024 items and year-to-year comparisons of fiscal 2025 to fiscal 2024. Discussions of fiscal 2023 items and year-to-year comparisons of fiscal 2024 and fiscal 2023 are not included in this Annual Report and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the year ended December 29, 2024. This discussion contains forward-looking statements that involve risks and uncertainties. For more information, see the section of this Annual Report titled “Cautionary Note Regarding Forward-Looking Statements.”

Overview

We operate and report financial information on a 52 or 53-week fiscal year ending on the Sunday closest to December 31. Fiscal 2025 reflects our results of operations for the 52-week period ended December 28, 2025. Fiscal 2024 reflects our results of operations for the 52-week period ended December 29, 2024.

We conduct our business through the following three reported segments:

•U.S.: Includes all Company-owned operations in the U.S., and Insomnia Cookies Bakeries globally through the date of deconsolidation (refer to Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements for more information);

•International: Includes all Company-owned operations in the U.K., Ireland, Australia, New Zealand, Mexico, and Canada, as well as Japan for all periods covered by this Annual Report; and

•Market Development: Includes franchise operations across the globe.

The following table presents a summary of our financial results for the periods presented:

Fiscal Years Ended

(in thousands, except percentages)

December 28, 2025 (52 weeks)

December 29, 2024 (52 weeks)

% Change

Net Revenues (1)

$

1,522,616 

$

1,665,397 

-8.6 

%

Net (Loss)/Income (2)

(523,779)

3,815 

nm

Net (Loss)/Income Attributable to Krispy Kreme, Inc. (2)

(515,767)

3,095 

nm

Adjusted Net (Loss)/Income, Diluted (3)

(17,703)

19,170 

-192.3 

%

Adjusted EBIT (3)

34,458 

90,228 

-61.8 

%

Adjusted EBITDA (3)

140,253 

193,528 

-27.5 

%

(1)Organic revenue decline was (1.3)% in fiscal 2025. Refer to “Results of Operations” below for more information on and the calculation of organic revenue growth.

(2)“nm” as used here and within “Results of Operations” means “not meaningful.”

(3)Refer to “Key Performance Indicators and Non-GAAP Measures” below for more information as to how we define and calculate Adjusted EBITDA, Adjusted EBIT, and Adjusted Net (Loss)/Income, Diluted and for a reconciliation of Adjusted EBITDA, Adjusted EBIT, and Adjusted Net (Loss)/Income, Diluted to net (loss)/income, the most comparable measure calculated under accounting principles generally accepted in the U.S. (“GAAP”).

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Significant Events and Transactions

Our Turnaround Plan

During fiscal 2025, we implemented a comprehensive turnaround plan to deleverage the balance sheet and deliver sustainable, profitable growth through a focus on the following components:

•Refranchising: Improve financial flexibility through pursuit of opportunities to refranchise certain international equity markets, and to restructure our consolidated subsidiary in the western U.S., W.K.S. Krispy Kreme, LLC, which accounts for approximately 15% of revenues in the U.S. segment as of the fourth quarter of fiscal 2025, to a minority ownership interest while adding current Company-owned shops to the joint venture. In the first quarter of 2026, we completed the previously announced transaction to sell our operations in Japan, and we have taken steps towards refranchising our business in Canada;

•Improving return on invested capital: Reduce capital intensity by using existing assets and focusing on franchise development. We reduced capital expenditures by 18.9% from $120.8 million in fiscal 2024 to $97.9 million in fiscal 2025, and we expect to continue to reduce capital investment in fiscal 2026 compared to fiscal 2025. We are also making selective, capital-light investments in geographies which currently have limited access to our products or where we have insufficient production to meet demand. This includes opening in new international franchise markets such as Uzbekistan in the fourth quarter of 2025;

•Expanding profit margins: Expand profit margins through greater operational efficiency. During fiscal 2025, we focused on making doughnuts more efficiently through optimizing production, streamlining Hub activities, and improving labor productivity. In addition, we are focused on delivering fresh doughnuts more efficiently through outsourcing U.S. logistics and improving route management and demand planning, and through optimizing production and delivery schedules to support cost-effective expansion. During the fourth quarter of fiscal 2025, we continued to outsource some of our U.S. fresh deliveries to 3PL carriers, and expect to complete the transition to 3PL carriers during fiscal 2026; and

•Driving sustainable, profitable growth: Pursue U.S. growth based upon sustainable and profitable revenue streams. During fiscal 2025, we added more than 1,100 profitable fresh delivery doors with strategic partners and strategically closed approximately 1,400 underperforming fresh delivery doors in the U.S. (excluding McDonald’s USA doors). Our Global Points of Access at the end of fiscal 2025 of 15,194 represented a decrease of 13.5% compared to fiscal 2024, primarily driven by the strategic closure of underperforming fresh delivery doors including the exit of McDonald’s USA doors in the third quarter of fiscal 2025 discussed below.

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Table of Contents

Digital, Brand, and Innovation

We continue to prioritize expanding our digital channel sales, which grew in fiscal 2025 compared to fiscal 2024. Growth in our digital channel is due to improvements in our branded digital platform as well as increasing product availability through third party digital channels, including delivery apps and our customers’ digital platforms. Innovation is also a significant driver of frequency as we create promotions and products that attract media outlets to our brand across our Global Points of Access. Additionally, we deliver new product experiences that align with seasonal and trending consumer and societal interests and create positive connections through simple, frequent, brand-focused offerings that encourage shared experiences. During the fourth quarter of fiscal 2025 we delivered the joy that is Krispy Kreme through powerful specialty doughnuts and seasonal activations including Halloween, Fall, and Christmas among many others around the world.

Termination of the Business Relationship Agreement with McDonald’s USA

On June 24, 2025, we and McDonald’s USA announced that our companies jointly decided to terminate the Business Relationship Agreement effective July 2, 2025, resulting in the reduction of approximately 2,400 fresh delivery doors in the third quarter of fiscal 2025. We worked to quickly remove costs related to the McDonald’s USA partnership which we expect to continue positively impacting profitability trends for our U.S. segment in the first half of fiscal 2026. Refer to Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements for further information.

2024 Cybersecurity Incident

As previously disclosed, during the fourth quarter of fiscal 2024, unauthorized activity on a portion of our information technology systems resulted in our experiencing certain operational disruptions (the “2024 Cybersecurity Incident”). We incurred losses and costs from the incident, primarily in the fourth quarter of fiscal 2024 and early in the first quarter of fiscal 2025, which were estimated to have had an approximately $15 million aggregate impact on Adjusted EBITDA in those periods (includes margin on lost revenues, as well as operational inefficiencies). Our cybersecurity insurance offset a portion of the losses and costs from the incident. We accrued for $4.8 million of business interruption insurance proceeds during the fourth quarter of fiscal 2025 (subsequently received in the first quarter of fiscal 2026), resulting in cumulative business interruption proceeds of $14.1 million. In addition, we incurred $12.9 million of remediation costs, including fees for cybersecurity experts and other advisors, and received $2.4 million of insurance proceeds for these costs. The investigation of the 2024 Cybersecurity Incident was substantially completed in the second quarter of fiscal 2025.

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Table of Contents

Tariffs and Global Trade Uncertainty

The imposition of tariffs by the U.S. on imports has heightened uncertainty in the global trade environment. These tariffs, along with retaliatory measures by other countries, may increase inflationary pressure and raise the costs of our imported commodities, including, but not limited to, vegetable oil. Additionally, the broader implications of tariff-driven price increases could influence consumer spending habits and negatively affect our business. These factors have caused, and may continue to cause, substantial uncertainty and volatility in financial markets, and may result in further retaliatory measures. We may be unable to fully offset the impacts of these factors by adjusting the pricing of our products.

Goodwill and Other Asset Impairments

We assess goodwill for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. During the second quarter of fiscal 2025, we identified events and conditions that required a quantitative assessment of goodwill, as well as other long-lived fixed assets and leases. Refer to Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements for further information.

Revision of Financial Statements

As discussed in Note 2, Revision of Financial Statements, to the audited Consolidated Financial Statements, the Company identified and corrected an error in the classification of its redeemable noncontrolling interests. Management determined the error did not materially misstate previously issued financial statements and would be appropriate to correct in the current period.

The Company has revised previously issued financial information included in this Annual Report . The revisions do not affect the Company’s previously reported operating results, cash flows, or financial condition apart from the reclassification within the equity section of the balance sheet and the required redemption value accretion recognized in fiscal 2025.

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Key Performance Indicators and Non-GAAP Measures

We monitor the key business metrics and non-GAAP metrics set forth below to help us evaluate our business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. The calculation of the key business metrics discussed below may differ from other similarly titled metrics used by other companies, securities analysts, or investors.

Throughout this Annual Report, we utilize “Global Points of Access” as a key performance indicator. Global Points of Access reflect all locations at which fresh doughnuts can be purchased. We define Global Points of Access to include all Hot Light Theater Shops, Fresh Shops, Carts and Food Trucks, fresh delivery doors, Cookie Bakeries (through the date of the Insomnia Cookies deconsolidation in fiscal 2024), and other points at which fresh doughnuts can be purchased, at both Company-owned and franchise locations as of the end of the respective reporting period. We monitor Global Points of Access as a metric that informs the growth of our omni-channel presence over time and believe this metric is useful to investors to understand our footprint in each of our segments and by asset type.

The following table presents our Global Points of Access, by segment and type, as of the end of fiscal 2025, fiscal 2024, and fiscal 2023:

Global Points of Access

Fiscal Years Ended

December 28, 2025

December 29, 2024

December 31, 2023

U.S.:

Hot Light Theater Shops

235 

237 

229 

Fresh Shops

68 

70 

70 

Cookie Bakeries (1)

— 

— 

267 

Fresh Delivery Doors (2)

7,160 

9,644 

6,808 

Total

7,463 

9,951 

7,374 

International:

Hot Light Theater Shops

52 

49 

44 

Fresh Shops

527 

519 

483 

Carts, Food Trucks, and Other (3)

18 

17 

16 

Fresh Delivery Doors

4,225 

4,583 

3,977 

Total

4,822 

5,168 

4,520 

Market Development:

Hot Light Theater Shops

113 

108 

116 

Fresh Shops

1,130 

1,095 

968 

Carts, Food Trucks, and Other (3)

29 

30 

30 

Fresh Delivery Doors

1,637 

1,205 

1,139 

Total

2,909 

2,438 

2,253 

Total Global Points of Access (as defined)

15,194 

17,557 

14,147 

Total Hot Light Theater Shops

400 

394 

389 

Total Fresh Shops

1,725 

1,684 

1,521 

Total Cookie Bakeries (1)

— 

— 

267 

Total Shops

2,125 

2,078 

2,177 

Total Carts, Food Trucks, and Other

47 

47 

46 

Total Fresh Delivery Doors

13,022 

15,432 

11,924 

Total Global Points of Access (as defined)

15,194 

17,557 

14,147 

(1)Reflects the deconsolidation of Insomnia Cookies during fiscal 2024.

(2)Includes approximately 1,900 McDonald’s USA doors as of December 29, 2024, which were exited in the third quarter of fiscal 2025 due to termination of the Business Relationship Agreement with McDonald’s USA.

(3)Carts and Food Trucks are non-producing, mobile (typically on wheels) facilities without walls or a door where product is received from a Hot Light Theater Shop or Doughnut Factory. Other includes a vending machine. Points of Access in this category are primarily found in international locations in airports and train stations.

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During fiscal 2025, we added a net 47 Krispy Kreme branded Doughnut Shops globally, in countries such as Brazil, Canada, and France, among many others. The decrease to the total Global Points of Access in fiscal 2025 compared to the end of fiscal 2024 primarily relates to the strategic closure of underperforming fresh delivery doors including the exit of fresh delivery doors related to termination of the Business Relationship Agreement with McDonald’s USA.

We also utilize “Hubs” as a key performance indicator. We have an omni-channel strategy to reach more consumers where they are and drive sustainable, profitable growth, and this strategy is supported by a capital-efficient Hub and Spoke distribution model that provides a route to market and powers profitability. Our Hot Light Theater Shops and Doughnut Factories serve as centralized production facilities (“Hubs”). From these Hubs, we deliver doughnuts to our Fresh Shops, Carts and Food Trucks, and fresh delivery doors (“Spokes”) primarily through an integrated network of Company-operated delivery routes, designed to ensure quality and freshness. Throughout fiscal 2025, we continued to outsource some of our U.S. deliveries to 3PL carriers, and expect to complete the transition to 3PL carriers during fiscal 2026. Specific to the U.S. segment, certain legacy Hubs have not historically had Spokes. Many Hubs in the U.S. segment are being converted to add Spokes while certain legacy Hubs do not currently have the ability or need to add Spokes.

The following table presents our Hubs, by segment and type, as of the end of fiscal 2025, fiscal 2024, and fiscal 2023, respectively:

Hubs

Fiscal Years Ended

December 28, 2025

December 29, 2024

December 31, 2023

U.S.:

Hot Light Theater Shops (1)

223 

232 

220 

Doughnut Factories

6 

6 

4 

Total

229 

238 

224 

Hubs with Spokes

159 

158 

149 

Hubs without Spokes

70 

80 

75 

International:

Hot Light Theater Shops (1)

43 

40 

36 

Doughnut Factories

14 

14 

14 

Total

57 

54 

50 

Hubs with Spokes

57 

54 

50 

Market Development:

Hot Light Theater Shops (1)

111 

106 

112 

Doughnut Factories

26 

27 

23 

Total

137 

133 

135 

Total Hubs

423 

425 

409 

(1)Includes only Hot Light Theater Shops and excludes Mini Theaters. A Mini Theater is a Spoke location that produces some doughnuts for itself and also receives doughnuts from another producing location.

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Non-GAAP and Operating Measures

We report our financial results in accordance with GAAP; however, management evaluates our results of operations using, among other measures, organic revenue (decline)/growth, Sales per Hub, Systemwide Sales, adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBIT, Adjusted Net (Loss)/Income, Diluted, and Adjusted EPS as we believe these non-GAAP and operating measures are useful in evaluating our operating performance. Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying business, and they are consistent with how business performance is planned, reported and assessed internally by management and the Company’s Board of Directors.

Non-GAAP financial measures are not standardized and it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance under GAAP or a substitute for results reported under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, we urge you to review our non-GAAP financial measures in conjunction with our historical audited Consolidated Financial Statements and notes thereto included in this Annual Report and not to rely on any single financial measure.

Organic Revenue (Decline)/Growth

Organic revenue (decline)/growth measures our revenue growth trends excluding the impact of acquisitions, divestitures, and foreign currency, and we believe it is useful for investors to understand the expansion of our global footprint through internal efforts. We define “organic revenue (decline)/growth” as the (decline)/growth in revenues, excluding (i) the impact of revenues of acquired shops owned by us for less than 12 months following their acquisition, (ii) the impact of foreign currency exchange rate changes, (iii) the impact of shop closures related to restructuring programs, (iv) the impact of the divestiture of a controlling interest in Insomnia Cookies, (v) the impact of the divestiture of shops through refranchising, and (vi) the impact of revenues generated during the 53rd week for those fiscal years that have a 53rd week based on our fiscal calendar defined in the “Overview” section. See “Results of Operations” for our organic (decline)/growth calculations for the periods presented.

Adjusted EBITDA, Adjusted EBIT, Adjusted Net (Loss)/Income, Diluted, and Adjusted EPS

We define “Adjusted EBITDA” as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, and certain other non-recurring, infrequent or non-core income and expense items. Adjusted EBITDA, both on a consolidated and at the segment level, is a principal metric that management uses to monitor and evaluate operating performance and provides a consistent benchmark for comparison across reporting periods. “Adjusted EBITDA margin” reflects Adjusted EBITDA as a percentage of net revenues.

We define “Adjusted EBIT” as earnings before interest expense, net and income tax expense, with further adjustments for share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, and certain other non-recurring, infrequent or non-core income and expense items. Adjusted EBIT is a metric complementary to Adjusted EBITDA that takes into account depreciation expense and amortization of right of use assets, allowing management to have a view of performance when including amortized costs from capital investments and lease obligations.

We define “Adjusted Net (Loss)/Income, Diluted” as net (loss)/income attributable to common shareholders, adjusted for interest expense, share-based compensation, certain strategic initiatives, acquisition and integration expenses, amortization of acquisition-related intangibles, the tax impact of adjustments, and certain other non-recurring, infrequent or non-core income and expense items. “Adjusted EPS” is Adjusted Net (Loss)/Income, Diluted converted to a per share amount.

Adjusted EBITDA, Adjusted EBIT, Adjusted Net (Loss)/Income, Diluted, and Adjusted EPS have certain limitations, including adjustments for income and expense items that are required by GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses that are the same as or similar to some of the adjustments in this presentation, such as share-based compensation. Our presentation of these non-GAAP measures should not be construed to imply that our future results will be unaffected by any such adjustments. Management compensates for these limitations by relying on our GAAP results in addition to using these non-GAAP measures supplementally.

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The following tables present a reconciliation of net (loss)/income to Adjusted EBIT and Adjusted EBITDA, and net (loss)/income to Adjusted Net (Loss)/Income, Diluted and Adjusted EPS for the fiscal years presented:

Fiscal Years Ended

(in thousands)

December 28, 2025

December 29, 2024

December 31, 2023

Net (loss)/income

$

(523,779)

$

3,815 

$

(36,647)

Interest expense, net

65,795 

60,066 

50,341 

Income tax (benefit)/expense

(20,820)

15,954 

(4,347)

Share-based compensation

12,865 

35,149 

24,196 

Employer payroll taxes related to share-based compensation

307 

358 

395 

Loss/(gain) on divestiture of Insomnia Cookies

11,501 

(90,455)

— 

Goodwill impairment

355,958 

— 

— 

Other non-operating (income)/expense, net (1)

(1,967)

1,885 

3,798 

Strategic initiatives (2)

39,847 

19,993 

29,057 

Acquisition and integration expenses (3)

(111)

3,282 

511 

New market penetration expenses (4)

560 

1,407 

1,380 

Shop closure expenses, net (5)

56,394 

4,861 

17,335 

Restructuring and severance expenses (6)

6,396 

7,561 

5,050 

Gain on remeasurement of equity method investment (7)

— 

(5,579)

— 

Gain on sale-leaseback

(6,749)

(1,569)

(9,646)

Gain on refranchising (8)

(1,358)

— 

— 

Other (9)

8,340 

3,203 

4,307 

Amortization of acquisition related intangibles (10)

31,279 

30,297 

29,373 

Consolidated Adjusted EBIT

$

34,458 

$

90,228 

$

115,103 

Depreciation expense and amortization of right of use assets

105,795 

103,300 

96,521 

Consolidated Adjusted EBITDA

$

140,253 

$

193,528 

$

211,624 

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Fiscal Years Ended

(in thousands, except per share amounts)

December 28, 2025

December 29, 2024

December 31, 2023

Net (loss)/income

$

(523,779)

$

3,815 

$

(36,647)

Share-based compensation

12,865 

35,149 

24,196 

Employer payroll taxes related to share-based compensation

307 

358 

395 

Loss/(gain) on divestiture of Insomnia Cookies

11,501 

(90,455)

— 

Goodwill impairment

355,958 

— 

— 

Other non-operating (income)/expense, net (1)

(1,967)

1,885 

3,798 

Strategic initiatives (2)

39,847 

19,993 

29,057 

Acquisition and integration expenses (3)

(111)

3,282 

511 

New market penetration expenses (4)

560 

1,407 

1,380 

Shop closure expenses, net (5)

56,394 

4,861 

17,335 

Restructuring and severance expenses (6)

6,396 

7,561 

5,050 

Gain on remeasurement of equity method investment (7)

— 

(5,579)

— 

Gain on sale-leaseback

(6,749)

(1,569)

(9,646)

Gain on refranchising (8)

(1,358)

— 

— 

Other (9)

8,340 

3,203 

4,307 

Amortization of acquisition related intangibles (10)

31,279 

30,297 

29,373 

Loss on extinguishment of 2019 Facility (11)

— 

— 

472 

Tax impact of adjustments (12)

(20,958)

9,690 

(20,729)

Tax specific adjustments (13)

5,770 

(3,988)

(1,364)

Net loss/(income) attributable to noncontrolling interest

8,012 

(720)

(1,278)

Adjusted net (loss)/income attributable to common shareholders - Basic

$

(17,693)

$

19,190 

$

46,210 

Additional income attributed to noncontrolling interest due to subsidiary potential common shares

(10)

(20)

(28)

Adjusted net (loss)/income attributable to common shareholders - Diluted

$

(17,703)

$

19,170 

$

46,182 

Basic weighted average common shares outstanding

170,923 

169,341 

168,289 

Dilutive effect of outstanding common stock options, RSUs, and PSUs

— 

2,159 

2,204 

Diluted weighted average common shares outstanding

170,923 

171,500 

170,493 

Adjusted net (loss)/income per share attributable to common shareholders:

Basic

$

(0.10)

$

0.11 

$

0.27 

Diluted

$

(0.10)

$

0.11 

$

0.27 

(1)Primarily foreign translation gains and losses in each period, as well as equity method income from Insomnia Cookies following the divestiture of a controlling interest during fiscal 2024 until the sale of our remaining interest in the second quarter of fiscal 2025. Refer to Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements for more information.

(2)Fiscal 2025 consists primarily of $33.6 million in costs associated with the U.S. national expansion (including McDonald’s USA), including exit costs associated with the termination of the Business Relationship Agreement with McDonald’s USA, and $2.8 million in costs for the evaluation of potential opportunities to refranchise certain equity markets. Fiscal 2024 consists primarily of $8.2 million in costs associated with the divestiture of the Insomnia Cookies business, $7.3 million in costs preparing for the U.S. national expansion (including McDonald’s USA), and $4.0 million in costs associated with global transformation. Fiscal 2023 consists primarily of costs associated with global transformation of $5.9 million and U.S. initiatives such as the decision to exit the Branded Sweet Treats business, including property, plant and equipment impairments, inventory write-offs, employee severance, and other related costs of $17.8 million.

(3)Consists of acquisition and integration-related costs in connection with the Company’s business and franchise acquisitions, including legal, due diligence, and advisory fees incurred in connection with acquisition and integration-related activities for the applicable period.

(4)Consists of start-up costs associated with entry into new countries in which the Company has not previously operated, including Brazil and Spain.

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(5)Includes lease termination costs, impairment charges, and loss on disposal of property, plant and equipment.

(6)Fiscal 2025 consists primarily of costs associated with restructuring of the U.S. and U.K. businesses. Fiscal 2024 consists primarily of costs associated with the restructuring of the U.S. and U.K. executive teams. Fiscal 2023 consists primarily of costs associated with restructuring of the global executive team.

(7)Consists of a gain related to the remeasurement of the equity method investments in KremeWorks USA, LLC and KremeWorks Canada, L.P. to fair value immediately prior to the acquisition of the shops. Refer to Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements for more information.

(8)Includes gains and losses on the deconsolidation of assets and liabilities associated with the refranchising of certain Krispy Kreme shops.

(9)Fiscal 2025 and fiscal 2024 consist primarily of $7.4 million and $3.1 million, respectively, related to remediation of the 2024 Cybersecurity Incident, including fees for cybersecurity experts and other advisors, net of $2.4 million of insurance proceeds received in fiscal 2025 relating to these costs. Fiscal 2023 consists primarily of legal and other regulatory expenses incurred outside the ordinary course of business.

(10)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the Consolidated Statements of Operations.

(11)Includes interest expenses related to unamortized debt issuance costs from our prior credit agreement (the “2019 Facility”) associated with extinguished lenders as a result of the March 2023 debt refinancing.

(12)Tax impact of adjustments calculated by applying the applicable statutory rates. The Company’s adjusted effective tax rate is 17.9%, 34.0%, and 27.2%, for each of fiscal 2025, fiscal 2024, and fiscal 2023, respectively. Fiscal 2025 and fiscal 2024 also include the impact of disallowed executive compensation expense.

(13)Fiscal 2025 consists of the recording of valuation allowances of $4.9 million associated with tax attributes primarily attributable to incremental costs removed from the calculation of Adjusted Net (Loss)/Income, a discrete tax benefit unrelated to ongoing operations of $1.0 million, and the effect of various tax law changes on existing temporary differences of $0.2 million. Fiscal 2024 consists of the recognition of previously unrecognized tax benefits unrelated to ongoing operations of $0.3 million, a discrete tax benefit unrelated to ongoing operations of $0.5 million, the release of valuation allowances associated with the divestiture of Insomnia Cookies of $2.9 million, and the effect of various tax law changes on existing temporary differences of $0.3 million. Fiscal 2023 consists of the recognition of a previously unrecognized tax benefit unrelated to ongoing operations of $2.3 million, the effect of tax law changes on existing temporary differences $0.1 million, and a discrete tax benefit unrelated to ongoing operations of $1.0 million.

Sales Per Hub

In order to measure the effectiveness of our Hub and Spoke model, we use “Sales per Hub” on a trailing four-quarter basis, which includes all revenue generated from a Hub and its associated Spokes. Sales per Hub equals Fresh Revenues from Hubs with Spokes, divided by the average number of Hubs with Spokes for the period. Fresh Revenues include product sales generated from our Doughnut Shops (including digital channels), as well as fresh delivery sales, but excluding all Insomnia Cookies revenues as the measure is focused on the Krispy Kreme doughnut business. The average number of Hubs with Spokes for a period is calculated as the average of the number of Hubs with Spokes at the end of the five most recent quarters. The Sales per Hub performance measure allows us and investors to measure our effectiveness at leveraging the Hubs in the Hub and Spoke model to distribute product and generate cost efficiencies and profitability.

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Sales per Hub was as follows for each of the periods below:

Fiscal Years Ended

(in thousands, unless otherwise stated)

December 28, 2025 (52 weeks)

December 29, 2024 (52 weeks)

December 31, 2023 (52 weeks)

U.S.:

Revenues

$

913,050 

$

1,058,736 

$

1,104,944 

Non-Fresh Revenues (1)

(2,454)

(3,161)

(9,416)

Fresh Revenues from Insomnia Cookies and Hubs without Spokes (2)

(154,151)

(307,665)

(399,061)

Fresh Revenues from Hubs with Spokes

756,445 

747,910 

696,467 

Sales per Hub (millions)

4.7 

4.9 

4.9 

International:

Fresh Revenues from Hubs with Spokes (3)

$

535,088 

$

519,102 

$

489,631 

Sales per Hub (millions) (4)

9.7 

9.9 

9.7 

(1)Includes the exited Branded Sweet Treats business revenues as well as licensing royalties from customers for use of the Krispy Kreme brand.

(2)Includes Insomnia Cookies revenues (through the date of deconsolidation) and Fresh Revenues generated by Hubs without Spokes.

(3)Total International net revenues is equal to Fresh Revenues from Hubs with Spokes for that business segment.

(4)International Sales per Hub comparative data has been restated in constant currency based on current exchange rates.

In our International segment, where the Hub and Spoke model originated, Sales per Hub was $9.7 million, down from the $9.9 million generated in fiscal 2024 and consistent with the $9.7 million generated in fiscal 2023. The International segment illustrates the benefits of leveraging our Hub and Spoke model as the most efficient way to grow the business, as shown by the largely consistent Sales per Hub and higher Adjusted EBITDA margins despite elevated commodity costs and macroeconomic conditions. In the U.S. segment, we had Sales per Hub of $4.7 million, down from the $4.9 million in fiscal 2024 and fiscal 2023. In the U.S., we continue our efforts to increase the number of quality Spokes served by our Hubs. During fiscal 2025, we identified and exited underperforming Spokes in line with our efforts to optimize the segment. We expect to increase the number of quality Spokes through growth with fresh delivery customers across the U.S. coupled with a continued focus on identifying and addressing underperforming fresh delivery doors.

Systemwide Sales

We also utilize “Systemwide Sales” as a key performance indicator. Systemwide Sales reflects global sales of all Krispy Kreme products, whether operated by the Company or franchisees, excluding mix, equipment, and royalty revenue. Sales from franchisees are reported to the Company by such franchisees and are not included in Company revenues. The Company believes Systemwide Sales information is important because it is indicative of the health of the Company’s brand and aids in understanding the Company’s financial performance.

In fiscal 2025, we generated Systemwide Sales of $1.96 billion.

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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.

Fiscal Year ended December 28, 2025 compared to the Fiscal Year ended December 29, 2024

The following table presents our audited consolidated results of operations for fiscal 2025 and fiscal 2024:

Fiscal Years Ended

December 28,

2025 (52 weeks)

December 29,

2024 (52 weeks)

Change

(in thousands, except percentages)

Amount

% of Revenue

Amount

% of Revenue

$

%

Net revenues

Product sales

$

1,486,120 

97.6 

%

$

1,627,778 

97.7 

%

$

(141,658)

-8.7 

%

Royalties and other revenues

36,496 

2.4 

%

37,619 

2.3 

%

(1,123)

-3.0 

%

Total net revenues

1,522,616 

100.0 

%

1,665,397 

100.0 

%

(142,781)

-8.6 

%

Product and distribution costs

372,567 

24.5 

%

409,177 

24.6 

%

(36,610)

-8.9 

%

Operating expenses

799,024 

52.5 

%

809,916 

48.6 

%

(10,892)

-1.3 

%

Selling, general and administrative expense

226,270 

14.9 

%

274,303 

16.5 

%

(48,033)

-17.5 

%

Marketing expenses

45,073 

3.0 

%

47,695 

2.9 

%

(2,622)

-5.5 

%

Pre-opening costs

3,576 

0.2 

%

3,411 

0.2 

%

165 

4.8 

%

Goodwill and other asset impairments

432,422 

28.4 

%

4,464 

0.3 

%

427,958 

nm

Other income, net

(24,120)

-1.6 

%

(8,431)

-0.5 

%

(15,689)

186.1 

%

Depreciation and amortization expense

137,074 

9.0 

%

133,597 

8.0 

%

3,477 

2.6 

%

Operating loss

(469,270)

-30.8 

%

(8,735)

-0.5 

%

(460,535)

nm

Interest expense, net

65,795 

4.3 

%

60,066 

3.6 

%

5,729 

9.5 

%

Loss/(gain) on divestiture of Insomnia Cookies

11,501 

0.8 

%

(90,455)

-5.4 

%

101,956 

-100.0 

%

Other non-operating (income)/expense, net

(1,967)

-0.1 

%

1,885 

0.1 

%

(3,852)

-204.4 

%

(Loss)/income before income taxes

(544,599)

-35.8 

%

19,769 

1.2 

%

(564,368)

nm

Income tax (benefit)/expense

(20,820)

-1.4 

%

15,954 

1.0 

%

(36,774)

-230.5 

%

Net (loss)/income

(523,779)

-34.4 

%

3,815 

0.2 

%

(527,594)

nm

Net (loss)/income attributable to noncontrolling interest

(8,012)

-0.5 

%

720 

— 

%

(8,732)

nm

Net (loss)/income attributable to Krispy Kreme, Inc.

$

(515,767)

-33.9 

%

$

3,095 

0.2 

%

$

(518,862)

nm

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The following table presents a further breakdown of total net revenue and organic revenue growth by segment for the periods indicated:

(in thousands, except percentages)

U.S.

International

Market Development

Total Company

Total net revenues in fiscal 2025 (52 weeks)

$

913,050

$

535,088

$

74,478

$

1,522,616

Total net revenues in fiscal 2024 (52 weeks)

1,058,736

519,102

87,559

1,665,397

Total Net Revenues (Decline)/Growth

(145,686)

15,986

(13,081)

(142,781)

Total Net Revenues (Decline)/Growth %

-13.8%

3.1%

-14.9%

-8.6%

Less: Impact of Insomnia Cookies divestiture

(138,522)

—

—

(138,522)

Less: Impact of refranchising

(1,533)

—

445

(1,088)

Adjusted net revenues in fiscal 2024

918,681

519,102

88,004

1,525,787

Adjusted net revenue (decline)/growth

(5,631)

15,986

(13,526)

(3,171)

Impact of acquisitions

(26,334)

(3,102)

8,536

(20,900)

Impact of foreign currency translation

—

4,050

—

4,050

Organic Revenue (Decline)/Growth

$

(31,965)

$

16,934

$

(4,990)

$

(20,021)

Organic Revenue (Decline)/Growth %

-3.5%

3.3%

-5.7%

-1.3%

Total net revenue declined $142.8 million, or 8.6%, primarily impacted by the $138.5 million reduction associated with the divestiture of a controlling interest in Insomnia Cookies in the third quarter of fiscal 2024. Organic revenue declined by $20.0 million, or 1.3%, primarily driven by lower Doughnut Shop transaction volume impacted by consumer softness in a challenging macroeconomic environment and by Global Points of Access decline of 2,363, or 13.5%, 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. The organic revenue decline was partially offset by increased pricing of approximately 2% (primarily driven by our planned reduced discounting).

Our U.S. segment net revenue declined $145.7 million, or 13.8%, from fiscal 2024 to fiscal 2025, primarily due to the $138.5 million reduction associated with the divestiture of a controlling interest in Insomnia Cookies in the third quarter of fiscal 2024. U.S. organic revenue declined $32.0 million, or 3.5%, from fiscal 2024 to fiscal 2025, 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 2,488, or 25.0%, 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. The organic revenue decline was partially offset by increased pricing of approximately 2% (primarily driven by our planned reduced discounting).

Our International segment net revenue grew $16.0 million, or 3.1%, from fiscal 2024 to fiscal 2025, in spite of foreign currency translation impacts of $4.0 million. International organic revenue grew $16.9 million or 3.3%, from fiscal 2024 to fiscal 2025, driven primarily by growth in Canada, Japan, and Mexico. The organic revenue growth was partially offset by lower transaction volume in the U.K.

Our Market Development segment net revenue declined $13.1 million, or 14.9%, from fiscal 2024 to fiscal 2025, due to the impact of franchise acquisitions in fiscal 2024 (the results of acquired franchise businesses are reported within the Market Development segment prior to the respective dates of acquisition, and are reported within the U.S. or International segments, as applicable, following the respective dates of acquisition). Market Development organic revenue declined $5.0 million, or 5.7%, from fiscal 2024 to fiscal 2025, as expansion of our international franchise business in new markets such as Brazil and Spain was more than offset by timing of shipments of equipment to franchisees.

Product and distribution costs (exclusive of depreciation and amortization): Product and distribution costs decreased $36.6 million, or 8.9%, from fiscal 2024 to fiscal 2025, driven mainly by a $31.0 million impact from the divestiture of a controlling interest in Insomnia Cookies. Product and distribution costs as a percentage of revenue remained largely consistent at 24.6% in fiscal 2024 and 24.5% in fiscal 2025.

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Operating expenses: Operating expenses decreased $10.9 million, or 1.3%, from fiscal 2024 to fiscal 2025, driven mainly by a $66.4 million decrease resulting from the divestiture of a controlling interest in Insomnia Cookies that was partially offset by an increase of $55.5 million in operating expenses for the global Krispy Kreme brand primarily due to higher shop and delivery labor expenses, including logistics costs. Operating expenses as a percentage of revenue increased 390 basis points, from 48.6% in fiscal 2024 to 52.5% in fiscal 2025, primarily due to the impact of lower transaction volumes on operating leverage, operating costs associated with our now-ended McDonald’s USA partnership, and an estimated $5 million related to the 2024 Cybersecurity Incident, primarily related to operational inefficiencies.

Selling, general and administrative expense: Selling, general and administrative (“SG&A”) expenses decreased $48.0 million, or 17.5%, from fiscal 2024 to fiscal 2025, driven mainly by a $23.8 million impact from the divestiture of a controlling interest in Insomnia Cookies. As a percentage of revenue, SG&A decreased by 160 basis points, from 16.5% in fiscal 2024 to 14.9% in fiscal 2025, primarily driven by lower employee costs and share-based compensation expenses related to restructuring initiatives.

Goodwill and other asset impairments: For discussion of the $432.4 million non-cash goodwill and other asset impairments in fiscal 2025, refer to Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements.

Other income, net: Other income, net of $24.1 million in fiscal 2025 was primarily related to $16.5 million of cyber insurance proceeds related to the 2024 Cybersecurity Incident, which includes $14.1 million of business interruption insurance recoveries. Additionally, there were $6.7 million of gains on sale-leaseback transactions described in Note 10, Leases, to the audited Consolidated Financial Statements. Other income, net of $8.4 million in fiscal 2024 was primarily driven by a gain of $5.6 million related to the remeasurement of equity method investments to fair value immediately prior to the acquisition of Krispy Kreme shops referenced in Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements.

Depreciation and amortization expense: Depreciation and amortization expense increased $3.5 million, or 2.6%, from fiscal 2024 to fiscal 2025. As a percentage of revenue, depreciation and amortization expense increased 100 basis points, from 8.0% in fiscal 2024 to 9.0% in fiscal 2025, primarily driven by higher finance lease amortization expense and increased depreciation associated with capital assets placed into service to support our U.S. national expansion, including the McDonald’s USA rollout. We recorded long-lived asset and lease impairment charges during the second quarter of fiscal 2025, a portion of which related to assets supporting the U.S. national expansion, including the McDonald’s USA rollout, which we expect to impact the future rate of depreciation expense for these assets.

Interest expense, net: Interest expense, net increased $5.7 million, or 9.5%, from fiscal 2024 to fiscal 2025, primarily driven by higher finance lease interest expense and a higher average debt balance.

Loss/(gain) on divestiture of Insomnia Cookies: In the third quarter of fiscal 2024, we sold our controlling interest in Insomnia Cookies in exchange for cash proceeds. Following the transaction, we owned 34.7% of Insomnia Cookies and lost the ability to exercise control. Accordingly, we deconsolidated Insomnia Cookies and recorded a gain on divestiture of $90.5 million (gross of income taxes). In the second quarter 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). Refer to Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements for further information.

Income tax (benefit)/expense: Income tax benefit was $20.8 million in fiscal 2025, while income tax expense was $16.0 million in fiscal 2024. The variance of $36.8 million from fiscal 2024 to fiscal 2025 was primarily driven by lower pre-tax results in fiscal 2025, offset by the tax effect of nondeductible goodwill impairment charges.

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Results of Operations by Segment – Fiscal Year ended December 28, 2025 compared to the Fiscal Year ended December 29, 2024

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

Fiscal Years Ended

Change

(in thousands, except percentages)

December 28, 2025 (52 weeks)

December 29, 2024 (52 weeks)

$

%

U.S.

U.S. Adjusted EBIT

$

16,145 

$

52,361 

(36,216)

-69.2 

%

Depreciation expense and amortization of right of use assets

63,489 

60,406 

3,083 

5.1 

%

U.S. Adjusted EBITDA

79,634 

112,767 

(33,133)

-29.4 

%

International

International Adjusted EBIT

50,113 

59,407 

(9,294)

-15.6 

%

Depreciation expense and amortization of right of use assets

32,958 

31,309 

1,649 

5.3 

%

International Adjusted EBITDA

83,071 

90,716 

(7,645)

-8.4 

%

Market Development

Market Development Adjusted EBIT

43,949 

47,750 

(3,801)

-8.0 

%

Depreciation expense and amortization of right of use assets

143 

154 

(11)

-7.1 

%

Market Development Adjusted EBITDA

44,092 

47,904 

(3,812)

-8.0 

%

Total reportable segment Adjusted EBIT

110,207 

159,518 

(49,311)

-30.9 

%

Total reportable segment Adjusted EBITDA

206,797 

251,387 

(44,590)

-17.7 

%

Corporate

Corporate expenses within consolidated Adjusted EBIT

(75,749)

(69,290)

(6,459)

-9.3 

%

Depreciation expense and amortization of right of use assets

9,205 

11,431 

(2,226)

-19.5 

%

Corporate expenses within consolidated Adjusted EBITDA

(66,544)

(57,859)

(8,685)

-15.0 

%

Total consolidated Adjusted EBIT

$

34,458 

$

90,228 

$

(55,770)

-61.8 

%

Total consolidated Adjusted EBITDA

$

140,253 

$

193,528 

$

(53,275)

-27.5 

%

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

U.S. segment Adjusted EBIT decreased $36.2 million, or 69.2%, and Adjusted EBITDA decreased $33.1 million, or 29.4%. Of these decreases, $15.8 million of the reduction was associated with the divestiture of a controlling interest in Insomnia Cookies in the third quarter of fiscal 2024. The Adjusted EBITDA margin decline of 200 basis points to 8.7% in fiscal 2025 compared to fiscal 2024 was primarily driven by an estimated $13 million to $15 million adverse impact associated with our now-ended McDonald’s USA partnership, lower transaction volumes impacting operating leverage, and an estimated $5 million related to the 2024 Cybersecurity Incident, primarily related to operational inefficiencies. The U.S. Adjusted EBIT and Adjusted EBITDA decreases were partially offset by $14.1 million of business interruption insurance recoveries related to the 2024 Cybersecurity Incident.

International segment Adjusted EBIT decreased $9.3 million, or 15.6%, and Adjusted EBITDA decreased $7.6 million, or 8.4%. The Adjusted EBITDA margin declined 200 basis points to 15.5% in fiscal 2025 compared to fiscal 2024, as lower transaction volume continued to impact operating leverage for the International equity markets, particularly the U.K.

Market Development segment Adjusted EBIT and Adjusted EBITDA decreased $3.8 million, or 8.0%, with Adjusted EBITDA margin expansion of 450 basis points to 59.2% in fiscal 2025 compared to fiscal 2024, driven mainly by changes in the revenue mix, including fewer shipments of lower-margin equipment to franchisees, and growth in royalties.

Corporate expenses within Adjusted EBIT increased $6.5 million, or 9.3%, and corporate expenses within Adjusted EBITDA increased $8.7 million, or 15.0%, primarily reflecting a reduction in costs allocated to the business segments following the centralization of certain overhead functions.

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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 such as the divestiture of Insomnia Cookies. 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.

Refer to Note 9, Long-Term Debt, Note 10, Leases, and Note 16, Commitments and Contingencies, to the audited Consolidated Financial Statements for further information.

We had cash and cash equivalents of $42.4 million and $29.0 million as of December 28, 2025 and December 29, 2024, respectively. We believe that our existing cash and cash equivalents and available borrowing capacity under our credit facilities will be sufficient to fund our operating and capital needs for at least the next twelve months. In fiscal 2026, we expect to use our available cash to reduce debt and to continue to position the business for sustainable growth, including investing in shop improvements, ways to better serve our consumers, and ways to increase our omni-channel presence. Total capital expenditures for fiscal 2026 are expected to be between $50.0 million and $60.0 million, as we continue to deploy the capital-efficient Hub and Spoke model globally.

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 timing and extent of spending on business acquisitions, 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.

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Cash Flows

We have historically generated significant cash from operations and have substantial 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:

Fiscal Years Ended

(in thousands)

December 28, 2025 (52 weeks)

December 29, 2024 (52 weeks)

Net cash provided by operating activities

$

33,924 

$

45,832 

Net cash (used for)/provided by investing activities

(12,145)

19,280 

Net cash used for financing activities

(7,757)

(73,949)

Operating Activities

Cash provided by operations totaled $33.9 million for fiscal 2025, a decrease of $11.9 million compared with fiscal 2024. Cash provided by operations declined primarily due to a larger operating loss in fiscal 2025 compared to fiscal 2024 and the impact of our receipt of $7.7 million in cash proceeds from the settlement of interest rate swap derivative contracts in fiscal 2024, partially offset by the intentional paydown of obligations due under our SCF programs (discussed in Note 8, Vendor Finance Programs, to the audited Consolidated Financial Statements) in fiscal 2024.

Investing Activities

Cash used for investing activities totaled $12.1 million for fiscal 2025, a fluctuation of $31.4 million compared with fiscal 2024. The cash used for investing activities in fiscal 2025 was primarily due to cash for capital expenditures. As part of our turnaround plan, we expect to reduce capital investment by leveraging existing capacity where available and focusing on franchise development. These outflows were partially offset by the divestiture of our remaining ownership interest in Insomnia Cookies for $75.0 million in aggregate cash proceeds (discussed in Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements) and proceeds from sale-leaseback transactions (discussed in Note 10, Leases, to the audited Consolidated Financial Statements).

The cash provided by investing activities in fiscal 2024 was primarily due to the receipt of net proceeds of $124.1 million from the divestiture of Insomnia Cookies and an additional $45.0 million from the repayment of an intercompany loan due from Insomnia Cookies. These proceeds were partially offset by our use of $31.9 million cash for the acquisition of franchised shops in fiscal 2024, discussed in Note 3, Acquisitions and Divestitures, to the audited Consolidated Financial Statements.

Financing Activities

Cash used for financing activities totaled $7.8 million for fiscal 2025, a fluctuation of $66.2 million compared with fiscal 2024, primarily driven by the pay down of long term debt balances with a portion of the net proceeds received from the divestiture of Insomnia Cookies.

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Debt

Our long-term debt obligations consist of the following:

(in thousands) 

December 28,

2025

December 29,

2024

2023 Facility — term loan

$

742,825 

$

647,500 

2023 Facility — revolving credit facility

157,500 

172,000 

Short-term lines of credit

2,514 

5,000 

Less: Debt issuance costs

(2,904)

(3,322)

Financing obligations

77,894 

79,725 

Total long-term debt

977,829 

900,903 

Less: Current portion of long-term debt

(65,977)

(56,356)

Long-term debt, less current portion

$

911,852 

$

844,547 

2023 Secured Credit Facility

The Company is party to a credit agreement (the “2023 Facility”) consisting 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 9, Long-Term Debt, to the audited 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 4.4 to 1.00 as of the end of fiscal 2025 compared to 3.9 to 1.00 as of the end of fiscal 2024.

We were in compliance with the financial covenants related to the 2023 Facility as of December 28, 2025 and expect to remain in compliance over the next 12 months.

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%. As of December 28, 2025, the Company had drawn $2.5 million under the agreements which is classified within the Current portion of long-term debt on the Consolidated Balance Sheets.

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Critical Accounting Estimates

The financial information discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based upon or derived from the audited Consolidated Financial Statements, which have been prepared in conformity with GAAP. The preparation of the financial statements requires the use of judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses as well as related disclosures. We consider an accounting judgment, estimate, or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on the audited Consolidated Financial Statements.

On an ongoing basis, we evaluate our estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. We review our financial reporting and disclosure practices and accounting policies quarterly to confirm that they provide accurate and transparent information relative to the current economic and business environment. A summary of our significant accounting policies is included in Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements. We believe that our critical accounting estimates are:

Self-Insurance Risks and Receivables from Insurers

We are subject to workers’ compensation, vehicle, and general liability claims and are self-insured for a significant portion of our workers’ compensation, vehicle, and general liability claims up to the amount of stop-loss insurance coverage purchased from commercial insurance carriers. We maintain accruals for the estimated cost of claims, without regard to the effects of stop-loss coverage, using actuarial methods which evaluate known open and incurred but not reported claims and consider historical loss development experience. In addition, we record receivables from the insurance carriers for claims amounts estimated to be recovered under the stop-loss insurance policies when these amounts are estimable and probable of collection. We estimate such stop-loss receivables using the same actuarial methods used to establish the related claims accruals and taking into account the amount of risk transferred to the carriers under the stop-loss policies. The stop-loss policies provide coverage for claims in excess of retained self-insurance risks, which are determined on a claim-by-claim basis. As of December 28, 2025 and December 29, 2024, we had $31.2 million and $34.8 million, respectively, reserved for such programs. Inclusive of the receivables from the stop-loss insurance policies, the Company’s limited liability balance was $22.6 million and $18.7 million as of December 28, 2025 and December 29, 2024, respectively.

Our estimated liability is not discounted and is based on a number of assumptions and factors. The critical assumptions used in determining these related expenses and obligations are future cost projections of claims, which include healthcare cost projections. These critical assumptions are calculated based on historical Company data and experience, as well as appropriate market indicators including inflation, societal attitudes toward legal action, and changes in law. The assumptions are evaluated at least semiannually by us in conjunction with outside actuaries and are closely monitored and adjusted when warranted by changing circumstances. If a greater amount of claims are reported, or if the nature of the claims, including medical costs, results in increased exposure beyond our expectations, our liabilities may not be sufficient, and we could recognize additional expense.

Income Taxes

Our provision for income taxes, deferred tax assets and liabilities including valuation allowances requires the use of estimates based on our management’s interpretation and application of complex tax laws and accounting guidance. We establish reserves for uncertain tax positions for material, known tax exposures in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes relating to deductions, transactions and other matters involving some uncertainty as to the measurement and recognition of the item. We may adjust these reserves when our judgment changes as a result of the evaluation of new information not previously available and will be reflected in the period in which the new information is available. While we believe that our reserves are adequate, issues raised by a tax authority may be resolved at an amount different than the related reserve and could materially increase or decrease our income tax provision in future periods.

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Realization of deferred tax assets involves estimates regarding (i) the timing and amount of the reversal of taxable temporary differences, (ii) expected future taxable income, (iii) the ability to carry back or carry forward net operating losses and tax credits, and (iv) the impact of tax planning strategies. We believe that it is more likely than not that we will not realize the benefit of certain deferred tax assets and, accordingly, have established a valuation allowance against them. In assessing the need for a valuation allowance, we consider all available positive and negative evidence, including past operating results, projections of future taxable income and the feasibility of and potential changes to ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding our volume, pricing and costs. Although realization is not assured for the remaining deferred tax assets, we believe it is more likely than not that the remaining deferred tax assets will be realized through future taxable earnings or alternative tax strategies. However, deferred tax assets could be reduced in the near term if our estimates of taxable income are significantly reduced or tax strategies are no longer viable.

Goodwill and Indefinite Lived Intangible Assets

For each reporting unit, we assess goodwill for impairment annually at the beginning of the fourth fiscal quarter or more frequently when impairment indicators are present. If the carrying value of the reporting unit exceeds its fair value, we recognize an impairment charge for the difference up to the carrying value of the allocated goodwill. The fair value is estimated using a combination of a discounted cash flow approach and a market approach.

When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit is influenced by a number of factors, inclusive of the carrying value of the reporting unit’s goodwill, the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of acquisition. If we perform a quantitative assessment of an individual reporting unit’s goodwill, our impairment calculations contain uncertainties because they require management to make assumptions and to apply judgment when estimating future cash flows and asset fair values, including projected revenue growth and operating expenses related to existing businesses, product innovation and new shop concepts, as well as utilizing valuation multiples of similar publicly traded companies and selecting an appropriate discount rate. Estimates of revenue growth and operating expenses are based on internal projections considering the reporting unit’s past performance and forecasted growth, strategic initiatives, local market economics, and the local business environment impacting the reporting unit’s performance. The discount rate is selected based on the estimated cost of capital for a market participant to operate the reporting unit in the region. These estimates, as well as the selection of comparable companies and valuation multiples used in the market approaches are highly subjective, and our ability to realize the future cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance, and changes in our business strategies, including retail initiatives and international expansion.

In the quarter ended June 29, 2025, management identified impairment indicators that required a quantitative assessment of goodwill outside of management’s routine annual assessment. These indicators included that during the two quarters ended June 29, 2025, the Company experienced a decline in its stock price and market capitalization, which became significant and sustained during the quarter ended June 29, 2025. In addition, the Company’s operating results for the quarter were below previous forecasts. Lastly, the Company updated its forecasts for the full year following termination of the Business Relationship Agreement with McDonald’s USA during the quarter, and the updated forecasts were below previous forecasts. After completing the quantitative impairment test, management concluded that the estimated fair values of the U.S., Krispy Kreme Holding U.K. Ltd. (“KK U.K.”), and Krispy Kreme Holdings Pty Ltd. (“KK Australia”) reporting units had declined below their carrying values, and management recognized a cumulative, non-cash, partial goodwill impairment charge of $356.0 million (gross of income taxes) in the second quarter of fiscal 2025. As of September 29, 2025, we performed a quantitative impairment assessment for all of our reporting units. The estimated fair value of each reporting unit exceeded its carrying value and, therefore, no additional impairment was recorded.

For the fiscal years 2024 and 2023, there were no goodwill impairment charges. We believe the fair value of each of our reporting units is in excess of its carrying value, and absent a sustained multi-year global decline in our business in key markets such as the U.S., we do not anticipate incurring significant goodwill impairment in the next 12 months.

Other intangible assets, net primarily represent the trade names for our brands, franchise agreements (domestic and international), reacquired franchise rights, and customer relationships. The trade names have been assigned an indefinite useful life and are reviewed annually for impairment. The fair value calculation for the trade names includes estimates of revenue growth, which are based on past performance and internal projections for the intangible asset group’s forecasted growth and royalty rates, which are adjusted for our particular facts and circumstances. The discount rate is selected based on the estimated cost of capital that reflects the risk profile of the related business. These estimates are highly subjective, and our ability to

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achieve the forecasted cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance, and changes in our business strategies, including retail initiatives and international expansion. All other intangible assets are amortized on a straight-line basis over their estimated useful lives. Definite-lived intangible assets are assessed for impairment whenever triggering events or indicators of potential impairment occur. We did not have any impairment charges of indefinite-lived intangible assets during any of the periods presented, and we do not anticipate incurring significant impairment charges in the next 12 months.

Impairment of Long-Lived Assets

We evaluate property and equipment, lease right of use assets, and other definite lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. Expected cash flows associated with an asset are the key factor in determining the recoverability of the asset. For the recoverability evaluation, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For Company-owned Hub and Spoke assets, the impairment test is performed at the individual Hub asset group level (which includes a Hub and its related Spokes), which is inclusive of property and equipment and lease right of use assets. If the carrying amount of the assets exceeds the sum of the undiscounted cash flows, the Company records an impairment charge in an amount equal to the excess of the carrying value of the assets over the estimated fair value. Significant judgment is involved in determining the assumptions used in estimating future cash flows, including projected revenue growth, operating margins, economic conditions, and changes in the operating environment. Changes in these assumptions could have a significant impact on the recoverability of the asset and may result in additional impairment charges. For those Hubs and any other asset groupings where the carrying amount of the assets exceeds the sum of the undiscounted cash flows, the Company must make additional assumptions to determine the related fair values of the assets, including selection of an appropriate discount rate when the income approach is used.

Impairment charges related to the Company’s long-lived fixed assets were $39.4 million, $4.6 million, and $18.1 million for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, respectively. For the fiscal years ended December 28, 2025 and December 31, 2023 the Company recorded lease impairment and termination costs of $37.0 million and $6.6 million, respectively. For the fiscal year ended December 29, 2024 the Company recorded a net gain on lease termination of $0.1 million.

New Accounting Pronouncements

Refer to Note 1, Description of Business and Summary of Significant Accounting Policies, to the audited Consolidated Financial Statements for a detailed description of recent accounting pronouncements.

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