I thought for sure with the worsening economic climate, we could see KKD slip back into losses.
I see now that a conservative management is moving the company back into profitability and a better financial situation.
Yes, they could have paid down more debt, but they did a lot of that already, enough to take the company out of risk of bankruptcy. If they see better a better return on investment for the cash elsewhere, then they will use it for that purpose.
Yes, some of the earnings is attributable to the paydown in debt. When you pay off the debt holders, more earnings go to the equity holders.
Is the stock going up in AH due to short covering? Yes, of course. But the shorts would not be covering if the company's prospects were not improving.