By Will Feuer


Shares of Krispy Kreme surged after the company said it reached a deal to sell its donuts at McDonald's restaurants across the U.S.

The donut maker's stock jumped almost 21% to $15.01 in recent premarket trading. Through Monday, shares were down nearly 21% from a year earlier.

McDonald's said it will start rolling out the donuts in the second half of this year and they will be available all over the country by the end of 2026. McDonald's had already started trialing the rollout of Krispy Kreme donuts at some locations.

The deal is a boon for Krispy Kreme, which has been working to expand its distribution without driving up supply-chain costs. Krispy Kreme Chief Executive Josh Charlesworth said the partnership will double the company's distribution by the end of 2026.

Krispy Kreme returned to the public markets in 2021 through an initial public offering. Shares of the Charlotte, N.C.-based donut chain have since struggled, with the stock still below its IPO price. Analysts at Truist said investors are punishing the stock over demand concerns tied to weight-loss drugs such as Ozempic and Mounjaro.

The company, which also owns the Insomnia Cookies chain, has been honing its focus on its core donut operations. Krispy Kreme said last year that it has hired advisors to explore options, including a potential sale, for the Insomnia Cookies chain.

The company has been working to rein in costs at the Krispy Kreme brand while expanding its distribution, including overseas. Executives have said they believe there is room to grow distribution in the U.S. through quick-service restaurants such as McDonald's.

Charlesworth told investors last month that the company had already started investing in new donut-making sites to prepare for a broader rollout at third-party distributors. New donut-making sites are critical to expanding what Krispy Kreme calls its delivered fresh daily network.


Write to Will Feuer at Will.Feuer@wsj.com


(END) Dow Jones Newswires

03-26-24 0903ET