Krispy Kreme (DNUT) Declined Following Softer-Than-Expected Results

Baron Funds, an investment management firm, released its “Focused Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Q1 was a difficult start to the year. The fund declined 7.95% (Institutional Shares) in the quarter, compared to the Russell 2500 Growth Index’s (the Benchmark) 10.80% return. Please spare some time to check the fund’s top 5 holdings to know more about their top bets for 2025.

In its first-quarter 2025 investor letter, Baron Focused Growth Fund highlighted stocks such as Krispy Kreme, Inc. (NASDAQ:DNUT). Krispy Kreme, Inc. (NASDAQ:DNUT) is a doughnut company based in Charlotte, North Carolina. The one-month return of Krispy Kreme, Inc. (NASDAQ:DNUT) was 0.93%, and its shares lost 66.54% of their value over the last 52 weeks.  On May 7, 2025, Krispy Kreme, Inc. (NASDAQ:DNUT) stock closed at $4.33 per share with a market capitalization of $738.95 million.

Baron Focused Growth Fund stated the following regarding Krispy Kreme, Inc. (NASDAQ:DNUT) in its Q1 2025 investor letter:

"Shares of Krispy Kreme, Inc. (NASDAQ:DNUT) traded down following softer-than-expected quarterly earnings as a result of a cybersecurity incident that disrupted its online ordering system, a decline in U.S. retail sales, and weak international EBITDA margins due to disappointing performance in the U.K. 2025 guidance also missed expectations. We remain investors. Management is taking a conservative approach as it continues the national rollout with McDonald’s, which will significantly increase Krispy Kreme’s points of distribution and provide additional consumer awareness for the brand throughout the U.S."

Krispy Kreme, Inc. (NASDAQ:DNUT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Krispy Kreme, Inc. (NASDAQ:DNUT) at the end of the fourth quarter, compared to 15 in the third quarter. While we acknowledge the potential of Krispy Kreme, Inc. (NASDAQ:DNUT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered Krispy Kreme, Inc. (NASDAQ:DNUT) and shared the list of stocks on Jim Cramer’s Radar. The Q4 2024 letter from White Brook Capital Partners discussed on Krispy Kreme, Inc.'s (NASDAQ:DNUT) promising partnership with McDonald’s and the impacts of the cyberattack on its online sales. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.