Krispy Kreme Stock Jumps on McDonald's Deal

Krispy Kreme shares (DNUT) soared 18% in early trading Tuesday after the company said it is planning to sell its doughnuts at fast-food giant McDonald's (MCD) restaurants nationwide by the end of 2026.

The rollout will start In the second half of this year, but it will take roughly two and a half years as Krispy Kreme more than doubles its distribution to satisfy the partnership. Krispy Kreme Chief Executive Officer (CEO) Josh Charlesworth said the partnership would more than double the company’s points of access by the end of 2026.

The tie-up will also boost McDonald’s breakfast offerings.

Adding Krispy Kreme to its offerings will give McDonald’s “a chance to unlock new business opportunities in the breakfast category and throughout the day,” Tariq Hassan, McDonald’s USA’s Chief Marketing and Customer Experience Officer, said in a statement.

McDonald’s began selling Krispy Kreme doughnuts at some Kentucky restaurants in Oct. 2022 as part of a pilot program. Krispy Kreme also launched small-scale tests with other companies such as Costco Wholesale (COST) internationally, it said in its 2023 annual report published last month.

The news comes as persistently high prices make it harder for corporations such as McDonald’s to bring in more customers. During its latest earnings call, the fast-food giant said higher prices had weakened some segments of its business, particularly with low-income diners.

Shares of Krispy Kreme were up 18% to $14.73 as of 9:45 a.m. ET Tuesday. McDonald's was near flat at $278.37.

March 27, 2024