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Krispy Kreme Doughnuts, Inc. Message Board

  • di_vur_se_fi di_vur_se_fi Oct 31, 2005 9:13 PM Flag

    Headhunter's niche

    James Mead & Company was founded in 1988 and focuses on search assignments for consumer packaged/durable goods marketing, sales and general management professionals.

    So, I take it that kkd is in the "consumer packaged" sector, at least according to the kkd board.

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    • Where is the written language?

      It amazes me, after all the media scrutiny that kkd has had, that not one article, to the best of my knowledge, has been written about the bogus comp store sales calculation.

      imo, just the story behind that manipulation is worthy of a front-page wsj piece.

    • Not only is the written description of the comp stores sales calculation confusing, but the actual calculation itself deviated from the written language, depending on how good a number they wanted it to be.

      Restoration has been without a CFO for a few months now - maybe they can put Tate in that role so he can create some "magic moments" for his new employer.

    • Perhaps there's a 4th, more basic, factor at work here: KKD's signature product is so sweet and cloying that, after a few of them, some purveyors are turned off -- they cannot stand the thought of eating another one. {This happens a lot with food. I craved scallops at one time; now the very thought of scallops is deeply unpleasant.}

      Perhaps this is the mechanism by which the honeymoon period comes to an end.

    • not to late to dump restoration

    • Value, you sound like a smart guy. And unfortunately, lots of smart investors have been taken for a ride by this kompany.

      The fact that reasonably intelligent investors kontinue to be seduced by financials that the kompany itself has stated are bogus supports the argument that this stock should not be traded.

      Almost five years of bogus financials and no delisting. Unbelievable.

    • I'm well aware of that chart, being the one who first brought it to this board.

    • Falling sales aren't an accident. They are built into the Krispy Kreme business model. See this slide from a company presentation:

      Actually -- things are worse than this slide projects, because off-site sales are falling too. KKD has three problems that compound each other: (1) the "honeymoon period" is built into the business model, so when you stop moving into new markets, sales per store and especially the more profitable on-site sales per store fall, (2) the brand is losing its fad appeal, so sales both on-site and off-site are falling even more than the business model predicts, and (3) some of the off-site sales were never profitable.

    • It should be about time to resume reporting comp store sales. Now that they're closing stores and consolidating off-premise volume into the remaining stores, they should be able to report some better numbers. Where are John Tate and Scott Livengood when you need them?

      Wait a minute, I think Tate is over at Restoration Hardware where they're issuing earnings warnings. What a shock.

    • Same store sales aren't the same thing as average store sales. Average store sales were inflated by the honeymoon sales periods of newly opened stores. As Di_vur explains, KKD employed some corrupt methods to manipulate the same store sales numbers, not including stores in the base until their 19th month but most importantly playing around with where off-premise volume was sourced in order to jack up the number.

      It's obvious that same store sales have been declining for years.

      Next time you might want to think about doing research, then buying, rather than the other way around. And maybe wait until you know something before you run your mouth.

    • its too late for me to investigate, however, this appears to be an excellent post with a link to a more excellent post. as i said in last post, i will not nor can i defend their sorry accting and reporting.

      however, lets acknowledge that the 3 qtrs stated by the sc are as follows ... 50, 50, 49. this appears to be a plateau to me and/ or a stabilization.

      based upon your research and some common sense ... i would postulate that the previous data is such jibberish that it should be thrown out. therefore, what happens in the next few qtrs will be critical to any further analysis. do sales stay stable ? do they continue a free-fall?? do they increase?? i'll be watching. this data will be a key to whether i continue to hold or sell.

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