Krispy Kreme has officially terminated its heavily hyped national partnership with McDonald’s as CEO Josh Charlesworth It created “unsustainable operating costs” and resulted in $28.9 million in impairment and termination costs, it said. In other words, donuts don’t have enough dough. The consequences of a failed partnership are revealed Krispy Kreme’s latest earnings reportIn McDonald’s’ own flexible financial situation, it is a sharp contrast under the headwind of the field.
Krispy Kreme and McDonald jointly agreed to end their partnership on July 2, 2025, following an attempt to distribute Krispy Kreme Donuts at approximately 2,400 locations at McDonald’s Us. The collaboration was originally called a major growth opportunity, with insufficient operating pressure and return.
“Our two companies work very closely, each supporting execution, marketing and training, providing an excellent consumer experience,” Charlesworth said in a public statement. “Ultimately, the consistent effort to match our costs to the unit’s needs failed, which made our partnership unsustainable.”
Krispy Kreme’s Q2 The 2025 earnings statement details the $28.9 million rental barrier and termination expenses are directly attributed to McDonald’s cooperation, with assets costs of $22.1 million. The company’s leadership clarified that these losses forced strategic layoffs, ending the end of the coast-to-coast donut blitz that was once expected to be by the end of 2026.
Krispy Kreme’s Cringey revenue
Financial impact is a contributor to Krispy Kreme’s disappointing second-quarter earnings, which details revenue declines and net losses for the period ending June 29, 2025. Adjusted EPS was -0.15 USD, below the estimated -0.03 USD. The slight decline in organic revenue was 0.8%, while the company’s non-cash charges totaled $446 million, an overwhelming portion of a net loss of $441 million.
Charlesworth said the bad results mainly reflect the McDonald’s deal. He added: “We are quickly canceling our partnership with McDonald’s and extending the costs associated with fresh delivery through large doors that are profitable to key customers.”
Krispy Kreme is now accelerating plans to exit unprofitable partnerships, refocus on profitable channels (including supermarkets and convenience partnerships) and seeking expansion of international franchises. It also sells its remaining stake in Insomnia Cookies and reopens more markets, including in Australia, New Zealand, Mexico and the UK, with the aim of reducing balance sheets and lifting cash for future investments.
McDonald’s believes that stability and growth
For McDonald’s, the Krispy Kreme partnership is a small experiment compared to the size of its regular business. Donut sales represent only a small part of the breakfast menu and their demolition did not conceal McDonald’s financial situation.
according to McDonald’s revenue in the second quarterThe company has overcome economic uncertainty and has changed consumer habits with amazing power. Comparable sales worldwide grew by 3.8%, and sales in our same-store increased by 2.5%. The combined revenue reached $6.84 billion, a 5% year-on-year increase and beat analyst expectations. Net income rose 11% to $2.25 billion, with adjusted earnings per share of $3.19.
CEO Chris Kempczinski stressed that McDonald’s remains committed to providing “delicious, affordable and convenient options” and will continue to drive growth through digital investments and menu innovation, recently announcing returns on popular items and new promotions.
McDonald’s mentioned wealth arrive Joint announcement Partnership with Krispy Kreme related to cancellation. Charlesworth said the two companies “work very closely” in about 2,400 McDonald’s restaurants, but that’s not sustainable. The news also said Krispy Kreme represents a small but not material part of McDonald’s breakfast industry, which remains a core pillar of McDonald’s business strategy. Krispy Kreme declined to comment.
Krispy Kreme’s way forward
With McDonald’s behind it, Krispy Kreme’s turnaround blueprint involves shifting attention to higher retail channels, franchising growth and lower operating costs. The company’s leadership suspended dividends and renegotiated credit agreements, raising new capital to stabilize operations.
Charlesworth acknowledged the blow but remains optimistic: “We are now decisively eliminating the costs associated with this partnership and expecting to return to profitability in the third quarter with a focus on sustainable, profitable growth”.
But the market response of Krispy Kreme has been downplayed: The stock has fallen by nearly 70% since January, based on deep skepticism about the road to recovery. During the same period, McDonald’s grew slightly above 5%.
Failed partnerships highlight the risks and complexity of extending niche products into a competitive world of fast food range, especially as American consumers keep their price and convenience driven. Meanwhile, for McDonald’s, it’s business as usual – Golden Arches Shining, Donuts.
For this story, wealth Use the generated AI to help with the initial draft. The editor verified the accuracy of the information before publishing.
