Krispy Kreme, Inc.

Thanks for standing by. My name is Regina, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Krispy Kreme fourth quarter 2024 earnings call. I would now like to turn the call over to Dre Eldridge, Krispy Kreme Investor Relations. Please go ahead.

Thank you. Good morning, everyone. Welcome to Krispy Kreme's fourth quarter 2024 earnings call. Thank you for joining us today. We will be referencing our earnings press release and presentation during the call. These are available on our investor relations website at investors.prisbycream.com. Joining me on the call this morning are President and Chief Executive Officer Josh Charlesworth and Chief Financial Officer Jeremiah Ashoukian. After prepared remarks, there will be a question and answer session. Before we begin, I would like to remind you that during this call, we will be making forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including statements of expectations, future events, or future financial performance. Forward-looking statements involve a number of risks, assumptions, and uncertainties, and we caution investors that many factors could cause actual results to differ materially from those contained in any forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's Form 10-K filed with the SEC and in the other filings we make from time to time with the SEC. Forward-looking statements made today are only as of today. The company assumes no obligation to publicly update or revise any forward-looking statements except that may be required by law. Additionally, we will be referring to non-GAAP financial measures. Please refer to our earnings press release and presentation on our website for additional information regarding those non-GAAP measures, including a reconciliation to the closest comparable GAAP measures. Jeremiah will take us through our financial performance in a moment. But first, here's Josh.

Thanks, Dre. Good morning, everyone, and thank you for joining us. We delivered our 18th consecutive quarter of organic sales growth despite the cybersecurity incident we disclosed in December. I want to take a moment to thank our hardworking Krispy Kremers for their resilience through the disruption and acknowledge their unwavering dedication to our customers. As I reflect on 2024, I'm pleased that we delivered 21% revenue growth in our expanding US delivered fresh daily network and surpassed $250 million in sales for the first time through this channel. We're now operating in 40 countries around the world with an established pipeline of franchise market growth. We also reached several strategic milestones in our transformation to becoming a bigger and better Krispy Kreme. We simplified the business by divesting a majority stake in Insomnia Cookies. We added national distribution partners in the U.S. and we restructured our management teams to fully focus on our largest growth opportunities, profitable U.S. delivered fresh daily expansion and the wider adoption of our Capital Light international franchise model. Our transformation continues in 2025 with clear business priorities that are rooted in our strategy. We are spotlighting our core offerings. Our focus is on growing with national distribution partners. We expect to soon award contracts to outsource U.S. logistics. We have begun a process to evaluate re-franchising certain international markets, and we are strengthening our performance-based culture. Now I will walk you through these priorities. Our iconic brand is a distinctive and undeniable asset. delivering more than 100 billion media impressions last year, far more than businesses of a comparable size. In the fourth quarter, our team boosted consumer engagement with creative marketing, particularly through a viral Grinch video series promoting our Grinch Christmas specialty doughnut collection. And earlier this month, our Valentine's Day collection led to the biggest US retail sales day ever. This buzz not only creates awareness among Krispy Kreme fans, but it converts to sales. To maximize this conversion in 2025, our most beloved and affordable original glazed donuts will get the spotlight as we evolve our marketing efforts, simplify pricing, and focus on value-conscious consumers who we know are under pressure. For example, we plan to bring everyday value by offering additional savings for purchases of two or more dozen. Although we will offer fewer days overall on discount, We will use meaningful discounts to drive demand on days like National Donut Day that we can turn into buzzworthy events. We continue to expand availability in 2024 as we grew global points of access by 24%. In the U.S., we added more than 2,800 new doors with national partners such as McDonald's, Kroger, Publix, and Target who are eager to expand with us nationally. Internationally, company-owned points of access also increased 14%, driven by Australia and Canada. This very morning, we launched daily deliveries to approximately 500 McDonald's restaurants in the greater New York City area and remain on track to reach about 6,000 restaurants by year-end. In 2025, we expect to continue our U.S. expansion with national partners, both existing and new, for example, Costco. An added benefit of this expansion with national partners is the opportunity to identify and close existing underperforming doors, which we expect to do in 2025. While much of this growth is enabled by existing capacity, growing into new and underserved geographies will be supported by adding hubs with spokes, of which we now have 158. We expect to build five to seven of these in 2025 in areas like Minneapolis, keeping our expansion on track. Through this growth, we will increase doughnut volumes at existing production hubs, which is expected to improve productivity and profitability. As we become bigger, we must also become better. We're addressing the increased complexities that accompany growth by simplifying the businesses, focusing on what we do best, making doughnuts. Now, recent pilots confirmed that third-party logistics achieved excellent service levels and provided predictable logistics costs. We expect to soon award contracts to several national and regional carriers to outsource U.S. logistics. We are aiming to outsource more than half of our DFD deliveries by year end. Our most profitable, capital-like international franchise business grew points of access by 8% in 2024, as we expanded in markets such as France and South Korea. For example, our franchise partner in France has rapidly grown to 19 donut shops across Paris and plans to add another 50 points of access as they enter the DFD channel in 2025. This franchise model is the most capital efficient way for us to grow internationally. And so we've begun the process to evaluate re-franchising certain international markets. We also expect to open in two to four new countries with franchise partners, including Brazil and Spain in 2025. Between all international and US markets, we anticipate reaching more than 23,000 points of access by year end. An important initiative this year is strengthening our performance-based culture. We have launched new incentive-based compensation in the field focused on results-oriented metrics, such as consumer satisfaction and materials efficiency. We're also investing in operations leadership and simplifying shop employee and manager roles to support our Krispy Kremers. I believe that delivering on these priorities in 2025 will result in a bigger and better Krispy Kreme. With that, I'll pass it over to Jeremiah.