Krispy Kreme Rockets Up 46%

Highlights include Cosi, Inc. (COSI - Analyst Report), Jamba, Inc. (JMBA - Snapshot Report), Famous Dave’s of America, Inc. (DAVE - Snapshot Report) and Starbucks Corporation (SBUX - Snapshot Report).

Krispy Kreme Rockets on Creditor Reprieve & Improved Comps

Shares of Krispy Kreme Doughnuts, Inc. (KKD - Snapshot Report) are rocketing 46% today to $3.34, after announcing it secured credit agreement amendments that will enable it to stay in compliance. The amendments give the doughnut chain time to weather the recession while continuing to close under-performing units and reinvigorating same-store sales.

Comp sales showed signs of stabilization in the latest quarter ended February 1, rising 0.9%. Revenue, however, fell 17% to $91.8 million, as the company continues to close under-performing stores.

Once a favorite growth stock of Wall Street, Krispy Kreme was hurt in 2004 and 2005 by healthier eating trends, increased competition, over-expansion at the height of the low-carb-diet craze, bankruptcy filings by several of its franchisees and allegations of mismanagement by senior management. The stock, which traded at nearly $50 in 2003, fell to $4 in 2005 and the company’s board forced out two executives it said were trying to "manage earnings" to meet Wall Street expectations. It has been in net-closure turnaround mode ever since.

Many public restaurant chains sacrificed profitability in recent years to satisfy investors’ appetites for rapid growth, including Cosi, Inc. (COSI - Analyst Report), Jamba, Inc. (JMBA - Snapshot Report), Famous Dave’s of America, Inc. (DAVE - Snapshot Report) and Starbucks Corporation (SBUX - Snapshot Report).