Krispy Kreme Inc.’s shares soared in their first day of trading, giving the doughnut chain a much-needed lift a day after it was forced to downsize its initial public offering.
The stock reversed an early decline and jumped 24% to $21 a share Thursday. The Charlotte, North Carolina-based company, which is owned by investment firm JAB Holdings BV, opened at $16.30, below the $17 IPO price.
The roller-coaster debut reflects the volatile environment for restaurants as the pandemic subsides. Many U.S. eateries, particularly those focused on breakfast, faced a difficult period of store closures and reduced sales as COVID-19 led Americans to eat more at home. Sales at U.S. Krispy Kreme shops rose 4.5% to $733.4 million in 2020, according to Technomic.
Krispy Kreme gave away more than 30 million doughnuts to healthcare workers, first responders, teachers, and others last year. This March, it began offering Americans who show their vaccination cards a free original glazed doughnut each day. By June 1, it had given away more than 1.5 million doughnuts in the push, which is set to run through the end of 2021.
The promotion resulted in more than 7.6 billion earned media impressions, according to a filing with the U.S. Securities and Exchange Commission.
On Thursday, Krispy Kreme CEO Michael Tattersfield downplayed the stock’s early performance, saying he was focused more on the investor base than the stock price.
“How I measure it is a little different — when you look at who is the quality of the investor that you brought on in your IPO,” he said in an interview. He said Krispy Kreme has attracted long-term holders, including sovereign wealth funds.
Krispy Kreme on Wednesday raised $500 million in its IPO, short of the $640 million it had sought. The company had initially marketed the shares at $21 to $24 apiece, according to a listing document.
Krispy Kreme is aiming to add 1,000 points of sale every year, including stores, grocery cabinets and convenience-store spaces, Tattersfield said.
The company sees “significant” room for growth both in the U.S. and internationally, the CEO said on Bloomberg Television. Brazil, China and Western Europe are under consideration for growth.
“There’s 150-plus countries that we’re not in,” he said. “So it’s not about putting a flag in another country. It’s the discipline of doing this right.”
JAB acquired Krispy Kreme in 2016 in a $1.35 billion deal to take it private. JAB, an investment vehicle for the Reimanns, one of Germany’s wealthiest families, has expanded aggressively in restaurants and beverages and controls Pret A Manger and JDE Peet’s.
Krispy Kreme has expanded in e-commerce, which now accounts for close to a fifth of sales in the U.S., fueled by its Insomnia Cookies delivery concept.