FOR IMMEDIATE RELEASE

KRISPY KREME REPORTS FINANCIAL RESULTS
FOR THE SECOND QUARTER OF FISCAL 2015

Reaffirms Full Year Adjusted EPS Guidance

Winston-Salem, NC – September 9, 2014 – Krispy Kreme Doughnuts, Inc. (NYSE: KKD) (the “Company”) today reported financial results for the second quarter of fiscal 2015, ended August 3, 2014. The Company also reaffirmed its adjusted earnings guidance for the full year.

Second Quarter Fiscal 2015 Highlights Compared to the Year-Ago Period:

• Systemwide store count rose 3.4% in the quarter (6.8% year-to-date) to 884 Company and franchise shops worldwide
• Systemwide domestic same store sales rose 2.8%, including a 1.1% gain at Company shops; constant currency international franchise same store sales declined 2.4%
• Revenues increased 6.9% to $120.5 million from $112.7 million
• Operating income was $9.6 million compared to $10.6 million; losses on agricultural derivatives reduced second quarter fiscal 2015 operating income by approximately $1.3 million ($0.02 per share adjusted)
• Adjusted net income was $9.0 million ($0.13 per share) compared to $9.6 million ($0.14 per share); adjusted net income and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings in the table accompanying this release)
• Net income was $5.8 million ($0.08 per share) compared to $4.7 million ($0.07 per share) in the second quarter last year
• Cash provided by operating activities was $14.0 million compared to $13.1 million in the second quarter last year

President and Chief Executive Officer Tony Thompson commented: “A key priority going into the quarter was to regain top line momentum in our Company shops. And we did, by very strategically using promotional incentives and other marketing tools to increase traffic count and top line growth.

“Our Company and domestic franchise shops posted same store sales gains of 1.1% and 3.8%, respectively, on top of double-digit growth in the second quarter last year. On a two-year stacked basis, same store sales rose 11.6% at Company stores and 15.8% at domestic franchise shops, enabling us to significantly outperform most, if not all, of our quick-service restaurant peers. Outside the U.S., our international franchisees continue to perform well, and we are excited about their success in their individual markets.

“With same store sales turning positive as we moved through the quarter and the momentum continuing into the current period, and with the acceleration of domestic unit growth and ongoing expansion in other countries, our 10%+ systemwide unit growth plan for fiscal 2015 is on track, and we are pleased to reaffirm our adjusted EPS guidance for the full year.”

Thompson continued: “Our longer-term strategic focus remains on increasing doughnut sales and guest traffic by creating more “every day” doughnut use occasions for our products, while enhancing and expanding our beverage platform. The introduction of Krispy Kreme ready-to-drink coffee earlier this year and the August launch of Krispy Kreme K-Cup® packs demonstrate our recent progress in bringing Krispy Kreme-branded beverages to market. However, I firmly believe that we have only scratched the surface in capitalizing on our retail and licensing beverage opportunities. We will, therefore, be investing to strengthen our beverage capabilities with the intention of building consumer awareness and market share from current levels.”

Thompson concluded: “Since joining Krispy Kreme in June, I have visited Company and franchise shops and commissaries across the country and met with team members, franchise partners, suppliers, guests and shareholders. Through these interactions, I have gained an even greater appreciation for Krispy Kreme’s inspiring culture, the talent of our team members and partners, and the widespread passion for our iconic brand from all our stakeholders. I am more excited than ever about our ability to grow our revenues, profitability and store count over the long-term.”

Second Quarter Fiscal 2015 Results

Consolidated Results

Revenues increased 6.9% to $120.5 million from $112.7 million.

Direct operating expenses were $101.1 million, representing 83.9% of revenues compared to 83.2% of revenues last year.

General and administrative expenses were $6.7 million (5.6% of revenues) compared to $5.7 million (5.0% of revenues) in the year-ago period. The increase in general and administrative expenses in the second quarter of fiscal 2015 reflects, among other things, previously announced expenses related to the implementation of the new enterprise resource planning system totaling approximately $0.9 million; there were no comparable ERP costs in the second quarter last year.

Operating income was $9.6 million compared to $10.6 million last year.

Adjusted net income was $9.0 million ($0.13 per share) compared to $9.6 million ($0.14 per share) last year.

Segment Results

Company Stores’ revenues increased 3.8% to $78.5 million from $75.7 million. Same store sales at Company shops rose 1.1% against an extremely robust gain of 10.5% in the second quarter last year. The Company Stores segment posted operating income of $1.3 million compared to $1.8 million last year.

On June 17, 2014, the Company acquired the business and operating assets of its franchisee in Birmingham, Alabama, consisting of four Krispy Kreme shops that had fiscal 2014 sales of approximately $9 million. The acquired assets include the seller’s franchise rights for 13 counties in Alabama. The total transaction consideration was approximately $7.5 million cash.

The Company Stores segment recorded charges to earnings related to the acquisition of approximately $0.4 million in the second quarter. The charges reflect the settlement as part of the acquisition of the pre-existing franchise contract between the Company and the franchisee, as well as approximately $0.1 million of transaction costs.

Approximately $3.9 million of the purchase price was allocated to reacquired franchise rights, which is being amortized to earnings through 2020, which was the expiration date of the terminated franchise agreement. After accounting for such amortization, the Company does not expect that the acquisition will have a material accretive effect on the Company’s results of operations, at least in the short term.

Domestic Franchise revenues increased 17.8% to $3.3 million, reflecting higher royalties, initial franchise fees and ancillary revenues. Total sales by domestic franchisees rose 7.0%, while same store sales at Domestic Franchise shops increased 3.8%. Domestic Franchise segment operating income increased to $1.9 million from $1.5 million last year.

International Franchise revenues increased 24.4% to $7.5 million, driven by higher royalties. Sales by international franchise stores rose 11.4% to $115 million (9.3% excluding the effects of foreign exchange rate changes). International Franchise segment revenues for the quarter include approximately $0.9 million of royalties collected in the quarter related to franchisee sales in prior periods which had not previously been recorded due to uncertainty surrounding their collection; similar collections from the same franchisee recorded as revenue in the second quarter of fiscal 2014 were approximately $0.3 million. Constant currency same store sales at international franchise stores fell 2.4% in the quarter compared to a decline of 7.1% in the second quarter last year, continuing the overall trend of improving same store sales internationally in recent years. International Franchise segment operating income was $5.1 million compared to $4.2 million in the second quarter last year.

KK Supply Chain revenues (including sales to Company stores) rose 4.0% to $59.5 million; external KK Supply Chain revenues rose 10.5% to $31.2 million. KK Supply Chain generated operating income of $8.5 million in the second quarter of fiscal 2015 compared to $9.0 million last year. KK Supply Chain operating income in the second quarter of fiscal 2015 includes approximately $1.3 million of realized and unrealized losses on agricultural derivative positions, compared to approximately $0.4 million of losses in the second quarter last year.

Full Year Outlook

Based on year-to-date results and other current information, management is reaffirming its forecast of adjusted net income for fiscal 2015 of between $48 million and $51 million ($0.69 to $0.74 per share). Achievement of this forecast would represent a year-over-year increase in adjusted earnings per share of between 13% and 21% from the $0.61 reported for fiscal 2014 which was, in turn, up 30% from fiscal 2013.

Conference Call

The Company will host a conference call to review results for the second quarter as well as its outlook for the balance of the year this afternoon at 4:30 p.m. (ET). A webcast of the conference call will be available at www.krispykreme.com. The conference call also can be accessed over the phone by dialing (877) 312-5514 or, for international callers, by dialing (970) 315-0452. An archived replay of the call will be available shortly after its conclusion by dialing (855) 859-2056, or (404) 537-3406 for international callers; the passcode is 84314242. The audio replay will be available through September 16, 2014. A transcript of the conference call also will be available on the Company’s website.

About Krispy Kreme

Krispy Kreme is a leading branded specialty retailer and wholesaler of premium quality sweet treats and complementary products, including its signature Original Glazed^® doughnut. Headquartered in Winston-Salem, NC, the Company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937. Today, there are over 880 Krispy Kreme shops in more than 20 countries around the world. Connect with Krispy Kreme at www.krispykreme.com.

###

Information contained in this press release, other than historical information, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s beliefs, assumptions and expectations of our future economic performance, considering the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. The words “believe,” “may,” “forecast,” “could,” “will,” “should,” “would,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “strive” or similar words, or the negative of these words, identify forward-looking statements. Factors that could contribute to these differences include, but are not limited to: the quality of Company and franchise store operations; our ability, and our dependence on the ability of our franchisees, to execute on our and their business plans; our relationships with our franchisees; our ability to implement our domestic and international growth strategies; our ability to implement our domestic small shop operating model; political, economic, currency and other risks associated with our international operations; the price and availability of raw materials needed to produce doughnut mixes and other ingredients, and the price of motor fuel; our relationships with wholesale customers; our ability to protect our trademarks and trade secrets; changes in customer preferences and perceptions; risks associated with competition; risks related to the food service industry, including food safety and protection of personal information; compliance with government regulations relating to food products and franchising; increased costs or other effects of new government regulations relating to healthcare benefits; and risks associated with the use and implementation of information technology. These and other risks and uncertainties, which are described in more detail in the Company’s most recent Annual Report on Form 10-K and other reports and statements filed with the United States Securities and Exchange Commission, are difficult to predict, involve uncertainties that may materially affect actual results and may be beyond the Company’s control, and could cause actual results, performance or achievements to be materially different from those expressed or implied by any of these forward-looking statements. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF INCOME

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED BALANCE SHEET

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

KRISPY KREME DOUGHNUTS, INC.

NON-GAAP FINANCIAL INFORMATION

As of February 2, 2014, the Company had net deferred income tax assets of approximately $107 million, of which approximately $58 million related to federal and state net operating loss carryovers. The Company’s federal net operating loss carryovers totaled approximately $174 million.

The Company has reported cumulative pretax income of over $120 million since the beginning of fiscal 2010, and the Company also has generated significant taxable income during this period. However, because of the Company’s utilization of its federal and state net operating loss carryovers and other deferred tax assets, the Company’s cash payments for income taxes have been relatively insignificant during this period. As a result, the provision for income tax expense has substantially exceeded cash payments for income taxes. Until such time as the Company’s net operating loss carryovers are exhausted or expire, GAAP income tax expense is expected to continue to substantially exceed the amount of cash income taxes payable by the Company.

In the second quarter of fiscal 2014, the Company recorded a charge of $1.0 million related to the retirement of its secured credit facilities, consisting principally of the writeoff of deferred financing costs related to the Company’s term loan, which was retired in full, and the termination of an interest rate hedge related to the term loan. Charges of this nature are not expected to recur on a regular basis.

The following non-GAAP financial information and related reconciliation of adjusted net income to GAAP net income are provided to assist the reader in understanding the effects of the above facts and transactions on the Company’s results of operations. In addition, the non-GAAP financial information is intended to illustrate the material difference between the Company’s income tax expense and income taxes currently payable. These non-GAAP performance measures are consistent with other measurements made by management in the operation of the business which do not consider income taxes except to the extent to which those taxes currently are payable, for example, capital allocation decisions and incentive compensation measurements that are made on a pretax basis.

KRISPY KREME DOUGHNUTS, INC.

SEGMENT INFORMATION

KRISPY KREME DOUGHNUTS, INC.

SELECTED OPERATING STATISTICS

KRISPY KREME DOUGHNUTS, INC.

STORE COUNT

KRISPY KREME DOUGHNUTS, INC.

STORE COUNT

KRISPY KREME DOUGHNUTS, INC.

STORE COUNT