Krispy Kreme

JOHN S. GLASS is the bravest stock analyst in America. Or maybe the most cynical. His favorite growth company, Krispy Kreme Doughnuts, doesn't earn much money, faces scary competitive challenges and sports a stock price that makes the Hope Diamond look cheap. Glass rates Krispy Kreme a "strong buy," but it's hard to find anybody who agrees. Krispy Kreme's executives apparently don't. They've been dumping shares by the millions. Glass gets bonus points on the bravery/cynicism meter because his employer, Deutsche Banc Alex.

Or if not an ode, how about a haiku? Deep-fried Kool-Aid? No. Burger with donuts for buns? Sales pitch worked. Taste? Meh.

THERE IT was in Time two weeks ago, a blurb in the Trend Alert section that, depending on your point of view, signals either the apocalypse or a new, more playful mood among newlyweds. The blurb said that in cities like Baltimore and Atlanta, the traditional wedding cake is being replaced by tiers of - you may want to be sitting - Krispy Kreme doughnuts. For this, you can thank - or blame - Matt and Sherri Rybczynski. I wish you could meet Matt and Sherri, who live in White Marsh. He's 31, she's 26. He's boy-band handsome, she has guys on the street walking into light poles.

It's National Doughnut Day.  You get a free doughnut at Dunkin' Donuts with the purchase of a beverage. And Krispy Kreme is just plain old giving a free doughnut to anyone who comes in, with no purchase necessary. But ake a look at the stressed-out comments on the promotion's Facebook page. One commenter said, "Our store said we couldn't get an apple fritter or a bar. I thought 'any variety' would mean ANY variety. " Follow-up commenters try to explain that a fritter is not a doughnut.

WINSTON-SALEM, N.C. - Krispy Kreme Doughnuts Inc., known for its hot glazed doughnuts, said yesterday that its first-quarter profit climbed 48 percent after sales surged and the company opened more stores. The doughnut maker also raised its full-year earnings forecast. Net income increased to $13.1 million, or 22 cents a share, from $8.86 million, or 15 cents, a year earlier. Sales rose 34 percent to $148.7 million in the period that ended May 4, the company said. Krispy Kreme opened six stores in the quarter for a total of 282 U.S. locations.

Krispy Kreme Doughnuts Inc., reeling from what it called accounting errors, said yesterday that it will reduce its reported profit for last year and that it is not able to borrow additional money from its banks. The company's shares fell nearly 15 percent. Krispy Kreme also said it expects to further reduce its past reported profits as an investigation by the Securities and Exchange Commission continues. It gave no indication when it expects to file overdue financial statements. The changes made by the company were relatively small, but investors were depressed that numerous issues still remained to be resolved, along with the possibility that Krispy Kreme might not have access to loans when they're needed.

Increasingly iconoclastic Krispy Kreme Doughnuts Inc. said yesterday that it will open a manufacturing facility in Baltimore County in the spring to help keep up with increasing demand. The company will hire about 60 people to make doughnuts for Krispy Kreme's account with Giant Food and other customers. The 18,000 square-foot plant in Woodlawn is scheduled to open in May. Currently, Giant stores are supplied by retail locations and a plant in Northern Virginia. "Business is very strong," said spokesman Stan Parker.

Krispy Kreme makes doughnuts that people line up to buy, at least when a store opens in a new market. It was this that made Krispy Kreme's stock hotter than its products when it burst onto the investment scene a few years ago. But now reality is setting in. The important thing about Krispy Kreme is not that it reported a quarterly loss this week. Nor is the crucial issue an investigation by the Securities and Exchange Commission, or the unwillingness of company auditors to sign off on its quarterly filings until the investigation is over.

The right to sell "Hot Doughnuts Now" in Baltimore will change hands at the end of this month. Krispy Kreme Doughnuts Inc. said yesterday that it will buy back its franchise rights to the Baltimore market and acquire four retail stores from the owners who gained the rights in 1996. The company, based in Winston-Salem, N.C., plans to combine its Baltimore and Washington markets. "We can operate more efficiently as one company vs. two," said Stan Parker, senior vice president of marketing for Krispy Kreme.

SYDNEY, Australia - Krispy Kreme Doughnuts Inc., known for its hot glazed doughnuts, has opened its first store outside North America near Sydney, aiming for part of the $4.7 billion that Australians spend each year on fast food. The store, in the western Sydney suburb of Penrith, is the first of 30 that Winston-Salem, N.C.-based Krispy Kreme plans to open in Australia in a venture with closely held Borderless Australia Pty. It is in talks to open stores in Japan, Spain and South Korea.

Assuming you've burned off enough calories at free yoga and fitness classes, here's a special treat: Friday, June 3 is National Doughnut Day ! And some companies plan to mark the occasion with promotions. Dunkin' Donuts is offering a free doughnut with drink purchase while supplies last. Bottled beverages displayed in the store's cooler don't qualify, actually, so plan to get something at the counter. Customers are also encouraged to follow @DunkinDonuts on Twitter, with hints that more prizes may be available.

Editor's note: Each Wednesday we'll bring you a Q&A with a Ravens player to help you learn a little more about the team. The second installment of this series is an interview with wide receiver Mark Clayton, whose 42-yard touchdown run during the first quarter of the Ravens' 17-10 victory against the Cincinnati Bengals on Sept. 7 was the longest rush by a nonrunning back in team history. Clayton discusses expectations, a career outside football and one of his first jobs. What was your welcome-to-the-NFL moment?

Last weekend, as I purchased a pair of pants in a department store, a display full of premium-grade chocolate bars in shiny gold wrappers sat on the checkout counter. Chocolate bars in the men's clothing checkout? An ever-vigilant consumer, I deduced this was more than an opportunity for the store to make easy money on impulse purchases. The first step It was the first step in a conspiracy: You buy a chocolate bar in the men's department. Seems innocent enough. Your desire for chocolate ignited, you buy and eat more chocolate bars after leaving the store.

PSC chief to hold hearing on BGE rate The newly named chairman of the Public Service Commission announced yesterday that he would hold hearings on BGE'S proposed 50 percent rate increase to ensure that it is justified. Steven B. Larsen, Gov. Martin O'Malley's nominee for PSC chairman, said the hearings will begin next week, after he and fellow O'Malley appointee Susanne Brogan join the commission. While O'Malley was mayor of Baltimore and a candidate for governor last year, the city successfully sued the PSC for failing to hold a proper hearing on a proposed 72 percent BGE rate increase last year.

If you invest in the stocks of consumer-related companies that you personally admire, you can't go wrong. Take Krispy Kreme Doughnuts Inc., for example. Well, maybe not Krispy Kreme, whose stock tanked 66 percent in 2004 and 54 percent in 2005. It has closed nearly 100 stores and just got around to holding its first annual meeting since 2004. Despite evidence of a revival - shares nearly doubled last year - it is a shadow of former sweet expectations. Or let's say you're a do-it-yourselfer who loves shopping at Home Depot Inc. Whoops, not a terrific example either, since its stock declined 5 percent in 2005 and 1 percent last year, significantly underperforming the broader market.

SAN DIEGO and Krispy Kreme Doughnuts shops have at least two things in common. They are sweet spots to visit. But they've left a sour taste in the mouths of investors. The city and the doughnut purveyor are having money problems. Both entities also have failed to file periodic financial reports demanded by investors and regulators. The Krispy Kreme entry in newspaper stock tables contains the designation "lf." That means "late filing." In future bond issues, San Diego will have to declare that it failed to file financial reports on time.

WASHINGTON - When cultural historians reflect on Southern food, they think about grits and fried chicken and chitlins and, of course, Krispy Kreme doughnuts.From Biloxi, Miss., to Charlotte, N.C., and invading the Midwest as far north as Fort Wayne, Ind., these deep-fried sugar- and fat-filled miracles have defined breakfast for millions of Americans.Now, the Smithsonian's National Museum of American History is honoring this culinary icon with an exhibit that illuminates its importance. In the age of the bagel, the old-fashioned donut - as American as peanut butter and jelly - is getting a nod.The museum last week accepted a donation of doughnut artifacts including equipment, memorabilia and documents from Krispy Kreme Doughnut Corp.

Hurting from falling sales and unable to borrow money, Krispy Kreme Doughnuts Inc. announced the retirement of its chief executive yesterday and hired as his successor a specialist in corporate reorganizations who is already running Enron Corp. The new boss, Stephen F. Cooper, has a history of working with companies that enter bankruptcy protection and reorganizing their debts, but in an interview last night he voiced confidence that Krispy Kreme would be different. "Keeping in mind that I have only been here for eight hours, it looks to me that the company has a reasonable level of free cash flow, so I see no reason why this should be a bankruptcy candidate," he said.

Krispy Kreme Doughnuts Inc. said yesterday that it had agreed to pay its two new top officers hourly rates of $760 and $695, as well as paying a possible bonus if they succeed in turning around the financially troubled company. But the company did not say whether it had secured a further extension from bank lenders who could declare the company in default on its loans, threatening a bankruptcy protection filing. In a filing with the Securities and Exchange Commission, Krispy Kreme said it had agreed to pay Stephen F. Cooper, its new chief executive, at an hourly rate of $760, and Steve G. Panagos, its new president and chief operating officer, at an hourly rate of $695.

Hurting from falling sales and unable to borrow money, Krispy Kreme Doughnuts Inc. announced the retirement of its chief executive yesterday and hired as his successor a specialist in corporate reorganizations who is already running Enron Corp. The new boss, Stephen F. Cooper, has a history of working with companies that enter bankruptcy protection and reorganizing their debts, but in an interview last night he voiced confidence that Krispy Kreme would be different. "Keeping in mind that I have only been here for eight hours, it looks to me that the company has a reasonable level of free cash flow, so I see no reason why this should be a bankruptcy candidate," he said.