Analyst Still Sweet On Krispy Kreme Doughnuts

Krispy Kreme Doughnuts (NYSE: KKD) posted disappointing fourth-quarter results, but an analyst stayed sweet on the one-time Wall Street darling Thursday.

The company opened sharply lower and closed at $19.02, off more than 6.5 percent.

But Roth Capital's Anton Brenner dismissed recent results as a matter of "one-time headwinds" and maintained a Buy rating and $27 target on the company.

Brenner sees widening profit margins and sustained, double-digit expansion of company and franchised stores.

Krispy Kreme, which has disappointed investors three of the past four quarters, recently rolled out a smaller-format design it calls "factory stores."

Brenner said the new format is encouraging domestic franchisees to expand, and should be applicable internationally as well.

The company's efforts to boost beverage sales as well as expanded product licensing may lead to wider profit margins, according to Brenner.

Krispy Kreme went public in 2000 and rose 500 percent to a peak three years later. But the shares are worth less than half that all-time high and have fallen about 4 percent in the past year.