Krispy Kreme stock plunges nearly 30% as it ends dividends, pauses McDonald’s expansion

Shares of Krispy Kreme Inc. (NASDAQ: DNUT) plunged over 28% on Thursday after the donut-and-coffee chain said it will no longer pay out its quarterly dividend and that it was “reassessing” the deployment of its planned McDonald’s rollout, and fell short of earnings expectations, according to Bloomberg.

Krispy Kreme’s earnings missed expectations for the first quarter of 2025, with the company posting an EPS (earnings per share) of negative $0.05, coming in below the EPS forecast of negative $0.04. It posted revenue of $375.2 million, within previous guidance but below a forecast of $385.11 million.

Following the announcement, Krispy Kreme’s stock fell by 28.18% in premarket trading, and was still down nearly 25% by the time of market close. According to data from InvestingPro, shares of the stock have fallen over 65% in the past year. At the same time, the company said it is ending its quarterly dividend in order to pay down its mounting debt.

“Our ability to become a bigger Krispy Kreme requires that we become better, and we are taking swift and decisive action to pay down debt, de-leverage the balance sheet and drive sustainable, profitable growth,” Krispy Kreme CEO Josh Charlesworth said.

Krispy Kreme, which started selling its donuts at McDonald’s in March 2024, and currently sells at some 2,400 burger chain locations, said it won’t be expanding that rollout in the second quarter after sales slowed below projects, CNBC reported.

Both companies had previously said the doughnuts would be sold in all McDonald’s U.S. locations by the end of 2026. Like many fast casual chains, McDonald’s is seeing less traffic in its U.S. stores, as consumers, worried about skyrocketing prices and a potential recession, are spending less.

Fast Company has reached out to McDonald’s for comment.

Like many companies, the donut maker also pulled its financial outlook due to the uncertainty surrounding pricing and sales caused by President Donald’s Trump’s tariff wars.

The well-known doughnut company, famous for its iconic Original Glazed doughnut, also sells beverages like coffee, and provides catering services.

Krispy Kreme has had significant operational challenges recently after a cybersecurity breach last November disrupted its online ordering systems, causing ongoing disruptions to digital sales, which make up 15.5% of the company’s doughnut-shop sales.