Krispy Kreme Inc. (NASDAQ:DNUT) saw its shares climb 22% to $3.65 in premarket trading on Thursday following the release of fourth-quarter results that exceeded Wall Street forecasts.
The company reported net revenue of $392.4 million for the quarter, outpacing the LSEG analyst consensus of $386.7 million. On the profitability front, adjusted earnings per share were reported at $0.09, which beat the LSEG estimate of $0.03.
Krispy Kreme attributed the stronger-than-expected performance to "strong consumer demand for its 'iconic, fresh doughnuts.'" The company noted that the quarterly figures represented a material beat on both the top and bottom lines versus expectations.
Market reaction and investor positioning
The better-than-expected results supplied an immediate lift to the stock, reversing some of the downward pressure the shares had experienced. Prior to the earnings release, the company had been under strain from bearish investors who had positioned for weakness in the business.
Short interest remains significant. LSEG data shows roughly 12.8% of Krispy Kreme's free float was sold short. By definition, short sellers take positions that profit if a stock declines in price; such concentrated short interest can both reflect negative sentiment and amplify price moves when news contradicts those expectations.
Context and implications
The quarter's results showed a simultaneous beat on revenue and adjusted earnings per share, which directly contributed to the premarket rally. Company commentary credited consumer demand for its core product as the driver behind the performance.
Investors should note the coexistence of stronger operating results and elevated short interest. High short interest signaled bearish positioning heading into the release and likely intensified the stock's reaction when the company posted numbers above analyst forecasts.
Beyond the immediate share-price move, the report illustrates how surprising delivery on consumer demand can shift market sentiment quickly, particularly for consumer-facing retail brands with notable short positioning.