Krispy Kreme has posted modest improvements in its top-line results for the third quarter, demonstrating the early progress of the company’s turnaround strategy.

For the quarter ended September 28, net revenue slid 1.2 per cent to $375.3 million, compared to the 13.5 per cent drop in the second quarter. The decrease in Q3 was primarily due to the sale of the company’s stake in Insomnia Cookies Holdings. 

US net revenue fell 5.3 per cent to $216.2 million, while international net revenue grew 7.3 per cent.

Organic revenue increased 0.6 per cent, reversing the 0.8 per cent decline in the second quarter.

US organic revenue contracted 2.2 per cent due to strategic door closures and lower retail transactions. International organic revenue grew 6.2 per cent, driven by continued momentum in Canada, Japan, and Mexico and recovery in the UK.

On the bottom line, the company remained in the red with GAAP net loss of $20.1 million, compared to net income of $37.6 million in the year-ago period. Adjusted EBITDA increased 17 per cent to $40.6 million.

“The third quarter marked a significant pivot as we implemented our comprehensive turnaround plan focused on Krispy Kreme’s two biggest opportunities: profitable US expansion and capital-light international franchise growth,” said Krispy Kreme CEO Josh Charlesworth.

“Early results showed progress over the second quarter with reduced leverage, positive free cash flow, and substantially higher adjusted EBITDA.”

Looking ahead, the company expects further improvement in adjusted EBITDA and positive free cash flow for the remainder of the year.