Krispy Kreme’s second appearance on the public markets is off to a sweeter start than expected.
The doughnut chain began trading Thursday and opened at $16.30 per share, which is about 4% below its initial public offering at $17. Since then, shares rebounded and closed nearly 25% higher on its first day of trading.
However, the company’s initial public offering was well below what the company was hoping for — $21 to $24 per share — when it announced its original terms last month. The tepid reaction from investors perhaps indicates Wall Street isn’t keen on a chain that exclusively focuses on sugary treats during this health-conscious era.
But Krispy Kreme CEO Mike Tattersfield remains optimistic about his company’s future.
“It’s a great day for us,” he told CNN Business. “The reason we’re going public again is because we truly transformed the company’s brand, culture and business model.”
Under his purview, Krispy Kreme has shifted toward an “omnichannel” approach, meaning it’s selling donuts in convenience and grocery stores, as well as packaged goods such as its branded K-Cups coffee. The company is also focused on its delivery business, which now represents a percentage of sales in the “high teens” he said.
Overall, it’s a “very different company” now, focusing on becoming the “most loved sweet treat brand in the world,” Tattersfield added.
The 84-year-old company announced in May it was, once again, going public. Krispy Kreme delisted its stock in 2016 after it went private following a $1.35 billion purchase from JAB Holding Company, a private firm that invests in food and beverage brands. It had previously gone public in 2000, and had some difficulties, including an accounting scandal, before the 2016 acquisition.
Tattersfield noted that Krispy Kreme’s $2.7 billion valuation is nearly three times higher than it was compared to its 2016 purchase price, indicating the changes are working, he said.
Krispy Kreme trades on the Nasdaq under the ticker symbol “DNUT.” J.P. Morgan, Morgan Stanley and Citigroup are some of the major banks underwriting the stock.
He said the the investors, which still include JAB, continues to be “really enthused about the journey and long term potential it has in the United States and around the globe.”
The brand has also been working to remodel its stores in recent years and has also opened lavish locations showcasing its sugary treats.
Last year, Krispy Kreme opened a 4,500-square-foot location in New York City’s Times Square with a glaze waterfall and a 24-hour street-side pickup window. Tattersfield said that location’s business has grown as more tourists come back to the city.
Krispy Kreme has around 400 locations in the United States. In total, there are 1,400 shops in 33 countries.