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Krispy Kreme Doughnuts, Inc. Message Board

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  • di_vur_se_fi di_vur_se_fi Feb 19, 2004 4:36 PM Flag


    Looks like 1/3 cup of butter per 15 doughnuts. According to my refrigerator, there are 2 cups per lb of butter, so that's about 6 * 15 = 90 doughnuts per lb. of butter.

    @ 3 billion doughnuts, that's 33 million lbs of butter. If the spot price is about 57 cents higher yoy, that's an incremental cost of

    $0.57 * 33,000,000 = $18.8 million (systemwide)

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    • Sounds like it is a fluctuating price, and may not last all year. If every $1 mil excess cost equates to $.01 hit to EPS (based on your previous post, although it seems to me it should be more based on 61 mil shares outstanding), then that would equate to a $.015 hit to EPS per month, or roughly $.05 per quarter, as long as the price of butter remains elevated.

      Is there a commodity market for butter? Is it even possible to hedge against such a price increase?

      Maybe they can just start sending unglazed doughnuts to Kroegers. They're apparently not selling anyway. (Come to think of it, maybe they should just send empty boxes and count them as sales... I mean, it's not like their published numbers are meaningful anyway...)

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