Krispy Kreme, the renowned doughnut brand, has witnessed a surge in its stock value as it embarks on a national partnership with fast-food giant McDonald's. This strategic collaboration aims to make Krispy Kreme's iconic doughnuts available across McDonald's locations throughout the United States by the end of 2026. The news has sparked investor excitement, propelling Krispy Kreme's shares to new heights.
The partnership between Krispy Kreme and McDonald's stems from a successful pilot project initiated in October 2022, which involved testing Krispy Kreme doughnuts in 160 McDonald's restaurants in Kentucky. The two companies will expand the program nationwide, with a phased roll-out scheduled to commence in the latter half of 2024.
Krispy Kreme's decision to exclusively supply its doughnuts to McDonald's in the U.S. until December 31, 2026, underscores the significance of this collaboration. This move is poised to significantly enhance accessibility to Krispy Kreme's beloved doughnuts, leveraging McDonald's extensive network of over 14,000 stores nationwide.
In addition to expanding its presence through partnerships, Krispy Kreme has pursued an aggressive growth strategy, aiming to establish outlets in at least 75,000 access points worldwide. This includes quick-service restaurants and grocery stores facilitated by a hub-and-spoke model. With a notable increase of 2,300 points of access in 2023 compared to the previous year, Krispy Kreme is on track to achieve its ambitious expansion goals.
Krispy Kreme is extending a generous offer to doughnut enthusiasts to commemorate the landmark partnership with McDonald's. Guests visiting any U.S. Krispy Kreme location between 5 p.m. and 9 p.m. today, March 26, will receive a complimentary original glazed doughnut, inviting them to experience the irresistible taste and freshness that defines Krispy Kreme's culinary craftsmanship.
The partnership announcement has ignited a surge of enthusiasm among investors, propelling Krispy Kreme's stock (DNUT) to remarkable heights. DNUT shares surged by 39.4% on Tuesday, surpassing its 50-day and 200-day moving averages.
This resurgence marks a significant turnaround for Krispy Kreme, which experienced a mild rebound from a 14-month low in mid-March, now boasting a 15% increase year-to-date and trading at its highest level since January 2022.
Meanwhile, McDonald's stock (MCD) maintained a stable position, closing flat on Tuesday following a marginal decline of 1.4% on Monday. However, MCD stock faces challenges, languishing below crucial support levels without substantial progress over the past ten months. Year-to-date, McDonald's has experienced a modest decline of approximately 6%.
McDonald's Remains Committed
The announcement of this partnership couldn't come at a better time for McDonald's, as the company seeks to navigate challenges posed by weak overseas demand and macroeconomic conditions.
Despite facing headwinds related to boycott campaigns and geopolitical tensions in some international markets, McDonald's remains committed to its global expansion plans. It aims to open approximately 10,000 restaurants worldwide by 2027.
As Krispy Kreme and McDonald's join forces to bring freshly baked doughnuts to consumers nationwide, the partnership signals a significant milestone for both companies. At the same time, investors eagerly anticipate the benefits of this collaboration; the future looks promising for both Krispy Kreme and McDonald's in the competitive landscape of the food industry.
