10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________

Form 10-Q

(Mark one)
	þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended May 5, 2013
		OR
	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from               to

Commission file number 001-16485
KRISPY KREME DOUGHNUTS, INC.
(Exact name of registrant as specified in its charter)

North Carolina	56-2169715
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
370 Knollwood Street	27103
Winston-Salem, North Carolina	(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(336) 725-2981

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   o	Accelerated filer   þ
Non-accelerated filer   o	Smaller reporting company   o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Number of shares of Common Stock, no par value, outstanding as of June 2, 2013: 65,486,521.

1

TABLE OF CONTENTS

		Page
FORWARD-LOOKING STATEMENTS		3
PART I - FINANCIAL INFORMATION		4
Item 1.	FINANCIAL STATEMENTS	4
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS	23
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
Item 4.	CONTROLS AND PROCEDURES	45
PART II - OTHER INFORMATION		45
Item 1.	LEGAL PROCEEDINGS	45
Item 1A.	RISK FACTORS	45
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	45
Item 3.	DEFAULTS UPON SENIOR SECURITIES	46
Item 4.	MINE SAFETY DISCLOSURES	46
Item 5.	OTHER INFORMATION	46
Item 6.	EXHIBITS	46
	SIGNATURES	47
	EXHIBIT INDEX	48

2

     As used herein, unless the context otherwise requires, “Krispy Kreme,” the “Company,” “we,” “us” and “our” refer to Krispy Kreme Doughnuts, Inc. and its subsidiaries. References to fiscal 2014 and fiscal 2013 mean the fiscal years ending February 2, 2014 and February 3, 2013, respectively.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that relate to our plans, objectives, estimates and goals. Statements expressing expectations regarding our future and projections relating to products, sales, revenues, expenditures, costs and earnings are typical of such statements, and are made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s beliefs, assumptions and expectations of our future economic performance, considering the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “strive” or similar words, or the negative of these words, identify forward-looking statements. Factors that could contribute to these differences include, but are not limited to:

• the quality of Company and franchise store operations;
   
• our ability, and our dependence on the ability of our franchisees, to execute on our and their business plans;
   
• our relationships with our franchisees;
   
• our ability to implement our international growth strategy;
   
• our ability to implement our domestic small shop operating model;
   
• political, economic, currency and other risks associated with our international operations;
   
• the price and availability of raw materials needed to produce doughnut mixes and other ingredients, and the price of motor fuel;
   
• our relationships with wholesale customers;
   
• our ability to protect our trademarks and trade secrets;
   
• changes in customer preferences and perceptions;
   
• risks associated with competition;
   
• risks related to the food service industry, including food safety and protection of personal information;
   
• compliance with government regulations relating to food products and franchising;
   
• increased costs or other effects of new government regulations relating to healthcare benefits;
   
• risks associated with implementation of new technology platforms; and
   
• other factors discussed in Krispy Kreme’s periodic reports and other information filed with the United States Securities and Exchange Commission (the “SEC”), including under Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2013 (the “2013 Form 10-K”).

All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

We caution you that any forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from the facts, results, performance or achievements we have anticipated in such forward-looking statements except as required by the federal securities laws.

3

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

	Page
Index to Financial Statements
Consolidated statement of income for the three months ended May 5, 2013 and April 29, 2012	5
Consolidated statement of comprehensive income for the three months ended May 5, 2013 and April 29, 2012	6
Consolidated balance sheet as of May 5, 2013 and February 3, 2013	7
Consolidated statement of cash flows for the three months ended May 5, 2013 and April 29, 2012	8
Consolidated statement of changes in shareholders’ equity for the three months ended May 5, 2013 and April 29, 2012	9
Notes to financial statements	10

4

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

	Three Months Ended
	May 5,			April 29,
	2013			2012
	(In thousands, except per share amounts)
Revenues	$	120,625		$	108,496
Operating expenses:
Direct operating expenses (exclusive of depreciation and amortization
expense shown below)		96,558			88,691
General and administrative expenses		6,055			6,458
Depreciation and amortization expense		2,820			2,482
Impairment charges and lease termination costs		8			31
Operating income		15,184			10,834
Interest income		61			27
Interest expense		(437	)		(398	)
Equity in losses of equity method franchisees		(53	)		(50	)
Other non-operating income and (expense), net		(5	)		78
Income before income taxes		14,750			10,491
Provision for income taxes		6,751			4,465
Net income	$	7,999		$	6,026
Earnings per common share:
Basic	$	0.12		$	0.09
Diluted	$	0.11		$	0.08

The accompanying notes are an integral part of the financial statements.

5

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended
	May 5,			April 29,
	2013			2012
	(In thousands)
Net income	$	7,999		$	6,026
Other comprehensive income:
Unrealized gain on cash flow hedge		10			2
Less income taxes		(4	)		(1	)
Total other comprehensive income		6			1
Comprehensive income	$	8,005		$	6,027

The accompanying notes are an integral part of the financial statements.

6

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED BALANCE SHEET
(Unaudited)

	May 5,			February 3,
	2013			2013
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	74,723		$	66,332
Receivables		26,166			25,627
Receivables from equity method franchisees		745			705
Inventories		14,408			12,358
Deferred income taxes		23,223			23,323
Other current assets		5,837			6,439
Total current assets		145,102			134,784
Property and equipment		80,339			78,024
Investments in equity method franchisees		-			-
Goodwill and other intangible assets		24,140			24,195
Deferred income taxes		87,083			93,088
Other assets		10,813			11,847
Total assets	$	347,477		$	341,938
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	2,029		$	2,148
Accounts payable		13,439			12,198
Accrued liabilities		27,985			32,330
Total current liabilities		43,453			46,676
Long-term debt, less current maturities		22,110			23,595
Other long-term obligations and deferred credits		26,262			25,235
Commitments and contingencies
SHAREHOLDERS’ EQUITY:
Preferred stock, no par value; 10,000 shares authorized; none issued and outstanding		-			-
Common stock, no par value; 300,000 shares authorized; shares issued and outstanding: May 5,
2013 - 65,487 and February 3, 2013 - 65,356		355,283			354,068
Accumulated other comprehensive loss		(332	)		(338	)
Accumulated deficit		(99,299	)		(107,298	)
Total shareholders’ equity		255,652			246,432
Total liabilities and shareholders’ equity	$	347,477		$	341,938

The accompanying notes are an integral part of the financial statements.

7

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

	Three Months Ended
	May 5,			April 29,
	2013			2012
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	7,999		$	6,026
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		2,820			2,482
Deferred income taxes		6,105			4,234
Accrued rent expense		217			114
(Gain) loss on disposal of property and equipment		(147	)		229
Share-based compensation		946			1,377
Provision for doubtful accounts		52			48
Amortization of deferred financing costs		124			103
Equity in losses of equity method franchisees		53			50
Other		(173	)		(67	)
Cash provided by operations		17,996			14,596
Change in assets and liabilities:
Receivables		(495	)		(155	)
Inventories		(2,132	)		482
Other current and non-current assets		3,084			540
Accounts payable and accrued liabilities		(4,290	)		(5,131	)
Other long-term obligations and deferred credits		230			32
Net cash provided by operating activities		14,393			10,364
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(5,459	)		(1,317	)
Proceeds from disposals of property and equipment		613			41
Other investing activities		183			(36	)
Net cash used for investing activities		(4,663	)		(1,312	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt		(1,608	)		(545	)
Deferred financing costs		-			(11	)
Proceeds from exercise of stock options		269			-
Proceeds from exercise of warrants		-			9
Repurchase of common shares		-			(1,300	)
Net cash used for financing activities		(1,339	)		(1,847	)
Net increase in cash and cash equivalents		8,391			7,205
Cash and cash equivalents at beginning of period		66,332			44,319
Cash and cash equivalents at end of period	$	74,723		$	51,524

The accompanying notes are an integral part of the financial statements.

8

KRISPY KREME DOUGHNUTS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)

						Accumulated
	Common					Other
	Shares		Common			Comprehensive			Accumulated
	Outstanding		Stock			Income (Loss)			Deficit			Total
	(In thousands)
Balance at February 3, 2013	65,356		$	354,068		$	(338	)	$	(107,298	)	$	246,432
Comprehensive income for the three months
ended May 5, 2013	-			-			6			7,999			8,005
Exercise of stock options	122			269			-			-			269
Share-based compensation	9			946			-			-			946
Balance at May 5, 2013	65,487		$	355,283		$	(332	)	$	(99,299	)	$	255,652
Balance at January 29, 2012	68,092		$	377,539		$	(336	)	$	(128,077	)	$	249,126
Comprehensive income for the three months
ended April 29, 2012	-			-			1			6,026			6,027
Write-off of deferred tax asset related to the
expiration of unexercised stock warrants	-			(7,174	)		-			-			(7,174	)
Exercise of warrants	1			9			-			-			9
Share-based compensation	11			1,377			-			-			1,377
Repurchase of common shares	(255	)		(1,854	)		-			-			(1,854	)
Balance at April 29, 2012	67,849		$	369,897		$	(335	)	$	(122,051	)	$	247,511

The accompanying notes are an integral part of the financial statements.

9

KRISPY KREME DOUGHNUTS, INC.

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

Note 1 — Accounting Policies

     Krispy Kreme Doughnuts, Inc. (“KKDI”) and its subsidiaries (collectively, the “Company”) are engaged in the sale of doughnuts and complementary products through Company-owned stores. The Company also derives revenue from franchise and development fees and royalties from franchisees. Additionally, the Company sells doughnut mix, other ingredients and supplies and doughnut-making equipment to franchisees.

Significant Accounting Policies

BASIS OF PRESENTATION. The consolidated financial statements contained herein should be read in conjunction with the Company’s 2013 Form 10-K. The accompanying interim consolidated financial statements are presented in accordance with the requirements of Article 10 of Regulation S-X and, accordingly, do not include all the disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) with respect to annual financial statements. The interim consolidated financial statements have been prepared in accordance with the Company’s accounting practices described in the 2013 Form 10-K, but have not been audited. In management’s opinion, the financial statements include all adjustments, which consist only of normal recurring adjustments, necessary for a fair statement of the Company’s results of operations for the periods presented. The consolidated balance sheet data as of February 3, 2013 were derived from the Company’s audited financial statements but do not include all disclosures required by GAAP.

BASIS OF CONSOLIDATION. The financial statements include the accounts of KKDI and its subsidiaries, the most significant of which is KKDI’s principal operating subsidiary, Krispy Kreme Doughnut Corporation.

Investments in entities over which the Company has the ability to exercise significant influence but which the Company does not control, and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. These entities typically are 25% to 35% owned and are hereinafter sometimes referred to as “Equity Method Franchisees.”

EARNINGS PER SHARE. The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share reflects the additional common shares that would have been outstanding if dilutive potential common shares had been issued, computed using the treasury stock method. Such potential common shares consist of shares issuable upon the exercise of stock options and warrants and the vesting of currently unvested shares of restricted stock and restricted stock units.

     The following table sets forth amounts used in the computation of basic and diluted earnings per share:

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Numerator: net income	$	7,999	$	6,026
Denominator:
Basic earnings per share - weighted average shares outstanding		67,012		69,562
Effect of dilutive securities:
Stock options and warrants		2,751		1,781
Restricted stock units		815		545
Diluted earnings per share - weighted average shares
outstanding plus dilutive potential common shares		70,578		71,888

Stock options and warrants with respect to 617,000 and 2.3 million shares for the three months ended May 5, 2013 and April 29, 2012, respectively, have been excluded from the computation of the number of shares used to compute diluted earnings per share because their inclusion would be antidilutive.

10

     COMPREHENSIVE INCOME. Accounting standards on reporting comprehensive income require that certain items, including foreign currency translation adjustments and mark-to-market adjustments on derivative contracts accounted for as cash flow hedges (which are not reflected in net income) be presented as components of comprehensive income. The cumulative amounts recognized by the Company under these standards are reflected in the consolidated balance sheet as accumulated other comprehensive income, a component of shareholders’ equity.

	May 5,			April 29,
	2013			2012
	(In thousands)
Accumulated other comprehensive loss:
Unrealized losses on cash flow hedge	$	(542	)	$	(547	)
Less: deferred income taxes		210			212
Balance at the end of the period, net of tax	$	(332	)	$	(335	)

CORRECTION OF BALANCE SHEET CLASSIFICATION ERROR. The Company’s KK Supply Chain transfers doughnut mixes and certain other goods to third-party distribution companies which, in turn, distribute such products to Company and franchise stores pursuant to distribution contracts with KK Supply Chain. The Company does not record revenues or profit on the product transfers to the distribution companies because all revenue recognition criteria are not met at that time. Revenues and profit are recorded only upon the delivery of the goods to the stores by the distribution companies (and the sales to Company shops are eliminated in consolidation). In the fourth quarter of fiscal 2013, the Company concluded that certain of the Company’s receivables from third-party distribution companies resulting from the product transfers had been incorrectly reported as a component of inventories, rather than as a component of receivables, in prior periods. The Company corrected this classification error as of February 3, 2013. While not material to previously issued financial statements, to enhance comparability, the Company corrected the corresponding error as of April 29 and January 29, 2012, by revising the classification of $3.8 million and $3.9 million, respectively, of receivables from the distribution companies previously classified as inventories to receivables. The error also affected the change in inventories and change in receivables line items in the statement of cash flows in the first quarter of fiscal 2013, but there was no effect on net cash provided by operating activities. The Company revised its statement of cash flows to adjust the increase in receivables from $261,000 to $155,000 and to adjust the decrease in inventories from $588,000 to $482,000 in first quarter of fiscal 2013. Correction of this error had no effect on the Company’s results of operations, total current assets, working capital, or total operating, investing, or financing cash flows.

Recent Accounting Pronouncements

In February 2013, the FASB issued guidance requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no material effect on the Company’s consolidated financial statements.

In July 2012, the FASB issued amended accounting guidance regarding indefinite-lived intangible asset impairment testing. The amended guidance permits, but does not require, an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not, the indefinite-lived intangible asset is impaired. This guidance is effective for the Company in fiscal 2014, with early adoption permitted. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no effect on the Company’s consolidated financial statements.

Note 2 — Segment Information

The Company’s reportable segments are Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment is comprised of the stores operated by the Company. These stores sell doughnuts and complementary products through both on-premises and wholesale sales channels, although some stores serve only one of these distribution channels. The Domestic Franchise and International Franchise segments consist of the Company’s franchise operations. Under the terms of franchise agreements, domestic and international franchisees pay royalties and fees to the Company in return for the use of the Krispy Kreme name and ongoing brand and operational support. Expenses for these segments include costs to recruit new franchisees, to assist in store openings, to support franchisee operations and marketing efforts, as well as allocated corporate costs. The majority of the ingredients and materials used by Company stores are purchased from the KK Supply Chain segment, which supplies doughnut mix, other ingredients and supplies and doughnut making equipment to both Company and franchisee-owned stores.

11

     All intercompany sales by the KK Supply Chain segment to the Company Stores segment are at prices intended to reflect an arms-length transfer price and are eliminated in consolidation. Operating income for the Company Stores segment does not include any profit earned by the KK Supply Chain segment on sales of doughnut mix and other items to the Company Stores segment; such profit is included in KK Supply Chain operating income.

The following table presents the results of operations of the Company’s operating segments for the three months ended May 5, 2013 and April 29, 2012. Segment operating income is consolidated operating income before unallocated general and administrative expenses and impairment charges and lease termination costs.

	Three Months Ended
	May 5,			April 29,
	2013			2012
	(In thousands)
Revenues:
Company Stores	$	81,921		$	73,341
Domestic Franchise		2,871			2,633
International Franchise		6,445			6,027
KK Supply Chain:
Total revenues		59,811			53,785
Less – intersegment sales elimination		(30,423	)		(27,290	)
External KK Supply Chain revenues		29,388			26,495
Total revenues	$	120,625		$	108,496
Operating income:
Company Stores	$	5,314		$	2,948
Domestic Franchise		1,439			1,569
International Franchise		4,531			4,494
KK Supply Chain		10,239			8,477
Total segment operating income		21,523			17,488
Unallocated general and administrative expenses (including depreciation
and amortization)		(6,331	)		(6,623	)
Impairment charges and lease termination costs		(8	)		(31	)
Consolidated operating income	$	15,184		$	10,834
Depreciation and amortization expense:
Company Stores	$	2,354		$	2,097
Domestic Franchise		14			55
International Franchise		3			3
KK Supply Chain		173			162
Corporate administration		276			165
Total depreciation and amortization expense	$	2,820		$	2,482

Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources among segments.

Note 3 — Income Taxes

The Company recognizes deferred income tax assets and liabilities based upon management’s expectation of the future tax consequences of temporary differences between the income tax and financial reporting bases of assets and liabilities. Deferred tax liabilities generally represent tax expense recognized for which payment has been deferred, or expenses which have been deducted in the Company’s tax returns but which have not yet been recognized as an expense in the financial statements. Deferred tax assets generally represent tax deductions or credits that will be reflected in future tax returns for which the Company has already recorded a tax benefit in its consolidated financial statements.

12

     The Company establishes valuation allowances for deferred income tax assets in accordance with GAAP, which provides that such valuation allowances shall be established unless realization of the income tax benefits is more likely than not.

The valuation allowance of $9.8 million at May 5, 2013 and February 3, 2013 represents the portion of the Company’s deferred tax assets management estimates will not be realized in the future. Such assets are associated principally with state net operating loss and state credit carryforwards having relatively short carryforward periods which are forecasted to expire unused, as well as federal foreign tax credits and federal jobs credit carryforwards forecasted to expire unused.

The realization of deferred income tax assets is dependent on future events. While management believes its forecast of future taxable income is reasonable, actual results inevitably will vary from management’s forecasts. Such variances could result in adjustments to the valuation allowance on deferred tax assets in future periods, and such adjustments could be material to the financial statements.

In fiscal 2008, the Company issued warrants to acquire shares of the Company’s common stock at a price of $12.21 per share in connection with the settlement of certain litigation. The warrants expired unexercised in the first quarter of fiscal 2013 and, accordingly, the Company will not be entitled to any income tax deduction related to them. Deferred tax assets at January 29, 2012 included approximately $7.2 million related to these warrants. In accordance with GAAP, such amounts were charged to common stock in the first quarter of fiscal 2013 because common stock in the accompanying consolidated balance sheet includes cumulative credits related to share-based compensation in excess of such amounts.

Note 4 — Receivables

The components of receivables are as follows:

	May 5,			February 3,
	2013			2013
	(In thousands)
Receivables:
Wholesale customers	$	10,459		$	11,244
Unaffiliated franchisees		10,877			9,728
Due from third-party distributors		3,820			3,590
Other receivables		1,206			1,216
Current portion of notes receivable		510			464
		26,872			26,242
Less — allowance for doubtful accounts:
Wholesale customers		(274	)		(373	)
Unaffiliated franchisees		(432	)		(242	)
		(706	)		(615	)
	$	26,166		$	25,627
Receivables from Equity Method Franchisees (Note 6):
Trade	$	745		$	705

13

     The changes in the allowance for doubtful accounts are summarized as follows:

	Three Months Ended
	May 5,			April 29,
	2013			2012
	(In thousands)
Allowance for doubtful accounts related to receivables:
Balance at beginning of period	$	615		$	1,158
Provision for doubtful accounts		69			107
Net recoveries (chargeoffs)		22			(735	)
Balance at end of period	$	706		$	530
Allowance for doubtful accounts related to receivables from Equity Method Franchisees:
Balance at beginning of period	$	-		$	-
Provision for doubtful accounts		(17	)		(59	)
Net recoveries (chargeoffs)		17			59
Balance at end of period	$	-		$	-

     The Company also has notes receivable from franchisees included in “Other assets” in the accompanying consolidated balance sheet which are summarized in the following table.

	May 5,			February 3,
	2013			2013
	(In thousands)
Notes receivable:
Notes receivable from franchisees, net of deferred gain of $1.7 million (Note 12)	$	2,376		$	1,738
Less — portion due within one year included in receivables		(510	)		(464	)
Less — allowance for doubtful accounts		(62	)		(62	)
	$	1,804		$	1,212

The changes in the allowance for doubtful accounts related to notes receivable are summarized as follows:

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Balance at beginning of period	$	62	$	68
Provision for doubtful accounts		-		-
Net recoveries (chargeoffs)		-		-
Balance at end of period	$	62	$	68

In addition to the foregoing notes receivable, the Company had promissory notes totaling approximately $3.2 million at May 5, 2013 and $3.3 million at February 3, 2013 representing primarily royalties and fees due to the Company which, as a result of doubt about their collection, the Company had not yet recorded as revenues. Payments were required to be made on a promissory note of approximately $220,000 of the $3.2 million balance at May 5, 2013.

14

Note 5 — Inventories

The components of inventories are as follows:

	May 5,		February 3,
	2013		2013
	(In thousands)
Raw materials	$	6,174	$	5,678
Work in progress		103		52
Finished goods and purchased merchandise		8,131		6,628
	$	14,408	$	12,358

Note 6 — Investments in Franchisees

As of May 5, 2013, the Company had investments in three franchisees. These investments have been made in the form of capital contributions and, in certain instances, loans evidenced by promissory notes. These investments are reflected as “Investments in equity method franchisees” in the consolidated balance sheet.

The Company’s financial exposures related to franchisees in which the Company has an investment are summarized in the tables below.

	May 5, 2013
	Company		Investment
	Ownership		and					Loan
	Percentage		Advances			Receivables		Guarantees
	(Dollars in thousands)
Kremeworks, LLC	25.0	%	$	900		$	335	$	332
Kremeworks Canada, LP	24.5	%		-			36		-
Krispy Kreme of South Florida, LLC	35.3	%		-			374		1,628
				900			745	$	1,960
Less: reserves and allowances				(900	)		-
			$	-		$	745

	February 3, 2013
	Company		Investment
	Ownership		and					Loan
	Percentage		Advances			Receivables		Guarantees
	(Dollars in thousands)
Kremeworks, LLC	25.0	%	$	900		$	281	$	437
Kremeworks Canada, LP	24.5	%		-			20		-
Krispy Kreme of South Florida, LLC	35.3	%		-			404		1,628
				900			705	$	2,065
Less: reserves and allowances				(900	)		-
			$	-		$	705

The Company has guaranteed loans from third-party lenders on behalf of certain Equity Method Franchisees, primarily to assist the franchisees in obtaining financing. The loans are collateralized by certain assets of the franchisee, generally the Krispy Kreme store and related equipment. The loan guarantee amounts represent the portion of the principal amount outstanding under the related loan that is subject to the Company’s guarantee.

The Company has a 25% interest in Kremeworks, LLC (“Kremeworks”), and has guaranteed 20% of the outstanding principal balance of certain of Kremeworks’ bank indebtedness, which, as amended, matures in October 2013. The aggregate amount of such indebtedness was approximately $1.7 million at May 5, 2013.

15

     Current liabilities include accruals for potential payments under loan guarantees of approximately $1.6 million at both May 5, 2013 and February 3, 2013 related to Krispy Kreme of South Florida, LLC (“KKSF”). The underlying indebtedness matured by its terms in October 2009. Such maturity had been extended on a month-to-month basis pursuant to an informal agreement between KKSF and the lender. In October 2012, KKSF received notice that the original lender had sold the loan to a new lender. The new lender has advised KKSF that the entire balance due under the loan is currently due and owing, but has not made demand for payment on KKSF. KKSF is seeking modifications of the loan agreement from the new lender to extend the maturity of the loan and, as an alternative, is seeking replacement financing from other lenders to refinance the balance of the loan. There was no liability reflected in the financial statements for the guarantee of Kremeworks’ debt because the Company did not believe it was probable that the Company would be required to perform under that guarantee. While there is no current demand on the Company to perform under either of the guarantees, there can be no assurance that the Company will not be required to perform and, if circumstances change from those prevailing at May 5, 2013, additional guarantee payments or provisions for guarantee payments could be required with respect to either of the guarantees, and such payments or provisions could be significant.

Note 7 — Commitments and Contingencies

Except as disclosed below, the Company currently is not a party to any material legal proceedings.

Pending Litigation

K² Asia Litigation

On April 7, 2009, a Cayman Islands corporation, K² Asia Ventures, and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, its franchisee in the Philippines, and other persons associated with the franchisee. The suit alleges that the Company and the other defendants conspired to deprive the plaintiffs of claimed “exclusive rights” to negotiate franchise and development agreements with prospective franchisees in the Philippines, and seeks unspecified damages. The Company believes that these allegations are false and intends to vigorously defend against the lawsuit.

Colchester Security Litigation

On January 27, 2012, Colchester Security II, LLC, the Company's former landlord in Lorton, Virginia, filed a suit against the Company in the Circuit Court of Fairfax County, Virginia alleging breach of the lease and negligence resulting in property damage at a commissary facility previously operated by the Company. The plaintiff seeks $2.7 million in damages. The Company denies the allegations and intends to pursue counterclaims of approximately $3.0 million relating to indemnity claims and breach of the lease. No liability has been recorded with respect to this matter because management does not believe it is probable that a loss has been incurred. In March 2013, both parties agreed to avail themselves of the Fairfax County Court’s alternate dispute resolution program, and the matter has been set for binding arbitration to commence on June 20, 2013.

Other Commitments and Contingencies

One of the Company’s lenders had issued letters of credit on behalf of the Company totaling $9.2 million at May 5, 2013, all of which secure the Company’s reimbursement obligations to insurers under the Company’s self-insurance arrangements.

Note 8 — Shareholders’ Equity

Share-Based Compensation for Employees and Directors

The Company measures and recognizes compensation expense for share-based payment (“SBP”) awards based on their fair values. The fair value of SBP awards for which employees and directors render the requisite service necessary for the award to vest is recognized over the related vesting period.

16

The aggregate cost of SBP awards charged to earnings for the three months ended May 5, 2013 and April 29, 2012 is set forth in the following table. The Company did not realize any excess tax benefits from the exercise of stock options or the vesting of restricted stock or restricted stock units during any of the periods.

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Costs charged to earnings related to:
Stock options	$	217	$	827
Restricted stock units		729		550
Total costs	$	946	$	1,377
Costs included in:
Direct operating expenses	$	496	$	370
General and administrative expenses		450		1,007
Total costs	$	946	$	1,377

Repurchases of Common Stock

Pursuant to the authorization of its Board of Directors, from March 27, 2012 through June 28, 2012, the Company repurchased $20 million of its common stock at an average price per share of $6.42. Through April 29, 2012, the Company repurchased 255,000 shares at an average cost of $7.27 per share, for a total cost of $1.9 million, of which approximately $1.3 million was settled prior to quarter end.

17

Note 9 — Impairment Charges and Lease Termination Costs

     The components of impairment charges and lease termination costs are as follows:

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Impairment of long-lived assets	$	-	$	-
Lease termination costs		8		31
Total impairment charges and lease termination costs	$	8	$	31

The Company tests long-lived assets for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. These events and changes in circumstances include store closing and refranchising decisions, the effects of changing costs on current results of operations, observed trends in operating results, and evidence of changed circumstances observed as a part of periodic reforecasts of future operating results and as part of the Company’s annual budgeting process. When the Company concludes that the carrying value of long-lived assets is not recoverable (based on future projected undiscounted cash flows), the Company records impairment charges to reduce the carrying value of those assets to their estimated fair values.

Lease termination costs represent the estimated fair value of liabilities related to unexpired leases, after reduction by the amount of accrued rent expense, if any, related to the leases, and are recorded when the lease contracts are terminated or, if earlier, the date on which the Company ceases use of the leased property. The fair value of these liabilities are estimated as the excess, if any, of the contractual payments required under the unexpired leases over the current market lease rates for the properties, discounted at a credit-adjusted risk-free rate over the remaining term of the leases. The provision for lease termination costs also includes adjustments to liabilities recorded in prior periods arising from changes in estimated sublease rentals and from settlements with landlords.

The transactions reflected in the accrual for lease termination costs are summarized as follows:

	Three Months Ended
	May 5,			April 29,
	2013			2012
	(In thousands)
Balance at beginning of period	$	646		$	709
Provision for lease termination costs:
Adjustments to previously recorded provisions resulting from
settlements with lessors and adjustments of previous estimates		2			23
Accretion of discount		6			8
Total provision		8			31
Payments on unexpired leases, including settlements with
lessors		(29	)		(46	)
Balance at end of period	$	625		$	694

Note 10 — Fair Value Measurements

The accounting standards for fair value measurements define fair value as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

The accounting standards for fair value measurements establish a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

• Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
   
• Level 2 - Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
   
• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement of the assets or liabilities. These include certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

18

Assets and Liabilities Measured at Fair Value on a Recurring Basis

     The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at May 5, 2013 and February 3, 2013.

	May 5, 2013
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
401(k) mirror plan assets	$	2,147	$	-	$	-
Agricultural commodity futures contracts		175		-		-
Interest rate derivative		-		7		-
Total assets	$	2,322	$	7	$	-

	February 3, 2013
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
401(k) mirror plan assets	$	1,816	$	-	$	-
Interest rate derivative		-		16		-
Total assets	$	1,816	$	16	$	-
Liabilities:
Agricultural commodity futures contracts	$	15	$	-	$	-

     The fair value of the interest rate derivative is estimated based on an indicative bid price.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

     There were no nonrecurring fair value measurements recorded during the three months ended May 5, 2013 and April 29, 2012.

19

Fair Values of Financial Instruments at the Balance Sheet Dates

     The carrying values and approximate fair values of certain financial instruments as of May 5, 2013 and February 3, 2013 were as follows:

	May 5, 2013				February 3, 2013
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
	(In thousands)
Assets:
Cash and cash equivalents	$	74,723	$	74,723	$	66,332	$	66,332
Receivables		26,166		26,166		25,627		25,627
Receivables from Equity Method Franchisees		745		745		705		705
Agricultural commodity futures contracts		175		175		-		-
Interest rate derivatives		7		7		16		16
Liabilities:
Accounts payable		13,439		13,439		12,198		12,198
Agricultural commodity futures contracts		-		-		15		15
Long-term debt (including current maturities)		24,139		24,139		25,743		25,743

     The fair value of the term loan is estimated based on an indicative bid price, valuation input Level 2. The carrying values of all other financial instruments approximate their fair values at May 5, 2013 and February 3, 2013.

Note 11 — Derivative Instruments

     The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are commodity price risk and interest rate risk. The Company does not hold or issue derivative instruments for trading purposes.

     The Company is exposed to credit-related losses in the event of non-performance by the counterparties to its derivative instruments. The Company mitigates this risk of nonperformance by dealing with highly rated counterparties.

     Additional disclosure about the fair value of derivative instruments is included in Note 10.

Commodity Price Risk

     The Company is exposed to the effects of commodity price fluctuations in the cost of ingredients of its products, of which flour, sugar and shortening are the most significant. In order to bring greater stability to the cost of ingredients, from time to time the Company purchases exchange-traded commodity futures contracts, and options on such contracts, for raw materials which are ingredients of its products or which are components of such ingredients, including wheat and soybean oil. The Company is also exposed to the effects of commodity price fluctuations in the cost of gasoline used by its delivery vehicles. To mitigate the risk of fluctuations in the price of its gasoline purchases, the Company may purchase exchange-traded commodity futures contracts and options on such contracts. The difference between the cost, if any, and the fair value of commodity derivatives is reflected in earnings because the Company has not designated any of these instruments as hedges. Gains and losses on these contracts are intended to offset losses and gains on the hedged transactions in an effort to reduce the earnings volatility resulting from fluctuating commodity prices. The settlement of commodity derivative contracts is reported in the consolidated statement of cash flows as a cash flow from operating activities. At May 5, 2013, the Company had commodity derivatives with an aggregate contract volume of 620,000 bushels of wheat. Other than the requirement to meet minimum margin requirements with respect to the commodity derivatives, there are no collateral requirements related to such contracts.

Interest Rate Risk

     All of the borrowings under the Company’s secured credit facilities bear interest at variable rates based upon either the lenders’ prime rate, the Fed funds rate or LIBOR. The interest cost of the Company’s debt may be affected by changes in these short-term interest rates and increases in those rates may adversely affect the Company’s results of operations.

     On March 3, 2011, the Company entered into an interest rate derivative contract having an aggregate notional principal amount of $17.5 million. The derivative contract entitles the Company to receive from the counterparty the excess, if any, of the three-month LIBOR rate over 3.00% for each of the calendar quarters in the period beginning April 2012 and ending December 2015. The Company is accounting for this derivative contract as a cash flow hedge.

20

Quantitative Summary of Derivative Positions and Their Effect on Results of Operations

     The following table presents the fair values of derivative instruments included in the consolidated balance sheet as of May 5, 2013 and February 3, 2013:

		Asset Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	2013		2013
		(In thousands)
Agricultural commodity futures contracts	Other current assets	$	175	$	-

		Liability Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	2013		2013
		(In thousands)
Agricultural commodity futures contracts	Accrued liabilities	$	-	$	15

		Asset Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Designated as a Cash Flow Hedge	Balance Sheet Location	2013		2013
		(In thousands)
Interest rate derivative	Other assets	$	7	$	16

21

The effect of derivative instruments on the consolidated statement of income for the three months ended May 5, 2013 and April 29, 2012, was as follows:

		Amount of Derivative Gain or (Loss)
		Recognized in Income
		Three Months Ended
	Location of Derivative Gain or (Loss) Recognized	May 5,			April 29,
Derivatives Not Designated as Hedging Instruments	in Income	2013			2012
		(In thousands)
Agricultural commodity futures
contracts	Direct operating expenses	$	(170	)	$	51
		Amortization of Derivative Asset
		Recognized in Income
		Three Months Ended
	Location of Amortization of Derivative Asset	May 5,			April 29,
Derivatives Designated as a Cash Flow Hedge	Recognized in Income	2013			2012
		(In thousands)
Interest rate derivative	Interest expense	$	(19	)	$	(2	)
		Amount of Derivative Gain or (Loss)
		Recognized in OCI
		Three Months Ended
	Location of Derivative Gain or (Loss) Recognized	May 5,			April 29,
Derivatives Designated as a Cash Flow Hedge	in OCI	2013			2012
		(In thousands)
Interest rate derivative	Unrealized gain on interest rate derivative	$	10		$	2
	Less - income tax effect		(4	)		(1	)
	Net change in amount recognized in OCI	$	6		$	1

Note 12 — Acquisitions and Divestitures

Business Combination

     On August 30, 2012, the Company acquired the assets and operations of one of its franchisees in exchange for $915,000 cash. The acquired assets consisted principally of two Krispy Kreme stores. The allocation of the purchase price was as follows: $464,000 to property and equipment, $8,000 to other assets, and the balance of $443,000 to reacquired franchise rights. The results of operations of the acquired business have been included with those of the Company from the acquisition date.

22

Asset Divestiture

On February 22, 2013, the Company refranchised three stores in the Kansas/Missouri market to a new franchisee who was a former employee of the Company; the Company closed a fourth store in the market in January 2013 in anticipation of the transaction. The aggregate purchase price of the stores and the related assets was approximately $1.1 million evidenced by a promissory note payable in installments equal to 3.5% of the stores’ sales, plus interest at 7% beginning in February 2013. The four stores had total sales of approximately $9 million in fiscal 2013. The Company did not record a significant gain or loss on the refranchising transaction.

On September 27, 2012, the Company sold to one of its franchisees the leasehold interests and certain other assets, including rights under franchise agreements, for three Krispy Kreme stores operated by the franchisee. The Company acquired the leasehold interests and other assets related to the three stores from the franchisee in August 2006 for $2.9 million cash. After the Company’s acquisition of the assets, the franchisee has continued to operate the stores for its own account pursuant to an operating agreement between the Company and the franchisee. The aggregate purchase price of the three stores and the related assets in the September 2012 transaction was approximately $3.6 million, of which approximately $360,000 was paid in cash at closing. The balance of the purchase price was evidenced by a promissory note in the approximate amount of $3.2 million, payable in monthly installments of approximately $51,000, including interest at 8%, beginning in November 2012, and a final installment of the remaining principal balance on October 1, 2017. The carrying value of the divested assets was approximately $1.9 million. Because the initial investment made by the franchisee to acquire the assets was less than the minimum amount necessary to recognize a gain on the sale, the Company deferred recognition of the $1.7 million gain, and such deferred gain is reflected as a reduction in the carrying value of the note receivable. The Company is reporting the principal and interest payments received from the franchisee as a reduction of the carrying value of the note. At such time as the franchisee’s investment exceeds 20% of the purchase price, the Company will reconsider whether recognition of a gain on the transaction is then appropriate.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

     The following discussion of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere herein.

Results of Operations

The following table sets forth operating metrics for the three months ended May 5, 2013 and April 29, 2012.

23

	Three Months Ended
	May 5,				April 29,
	2013				2012
Change in Same Store Sales (on-premises sales only):
Company stores		11.4		%		2.1		%
Domestic Franchise stores		11.3		%		5.8		%
International Franchise stores		(11.0	)	%		(7.9	)	%
International Franchise stores, in constant dollars(1)		(7.3	)	%		(7.4	)	%
Change in Same Store Customer Count - Company stores
(retail sales only)		10.3		%		1.3		%
Average guest check - Company stores (retail sales only)	$	7.33			$	7.14
Wholesale Metrics (Company stores only):
Average weekly number of doors served:
Grocery/mass merchants		5,370				5,603
Convenience stores		4,481				4,600
Average weekly sales per door:
Grocery/mass merchants	$	366			$	316
Convenience stores		266				248
Systemwide Sales (in thousands):(2)
Company stores	$	81,121			$	72,805
Domestic Franchise stores		80,986				71,972
International Franchise stores		110,255				104,920
International Franchise stores, in constant dollars(3)		110,255				101,514
Average Weekly Sales Per Store (in thousands):(4) (5)
Company stores:
Factory stores:
Commissaries — wholesale	$	203.2			$	181.9
Dual-channel stores:
On-premises		40.3				35.6
Wholesale		50.9				46.9
Total		91.2				82.5
On-premises only stores		40.4				35.1
All factory stores		80.0				72.5
Satellite stores		23.4				21.3
All stores		67.5				61.3
Domestic Franchise stores:
Factory stores	$	54.3			$	47.7
Satellite stores		18.6				18.0
International Franchise stores:
Factory stores	$	40.8			$	41.1
Satellite stores		10.4				11.7

24

(1)	Represents the change in International Franchise same store sales computed by reconverting franchise store sales in each foreign currency to U.S. dollars at a constant rate of exchange for each period.
(2)	Excludes sales among Company and franchise stores.
(3)	Represents International Franchise store sales computed by reconverting International Franchise store sales for the three months ended April 29, 2012 to U.S. dollars based upon the weighted average of the exchange rates prevailing in the three months ended May 5, 2013.
(4)	Includes sales between Company and franchise stores.
(5)	Metrics for the three months ended May 5, 2013 and April 29, 2012 include only stores open at the respective period end.

     The change in “same store sales” is computed by dividing the aggregate on-premises sales (including fundraising sales) during the current year period for all stores which had been open for more than 56 consecutive weeks during the current year (but only to the extent such sales occurred in the 57^th or later week of each store’s operation) by the aggregate on-premises sales of such stores for the comparable weeks in the preceding year. Once a store has been open for at least 57 consecutive weeks, its sales are included in the computation of same store sales for all subsequent periods. In the event a store is closed temporarily (for example, for remodeling) and has no sales during one or more weeks, such store’s sales for the comparable weeks during the earlier or subsequent period are excluded from the same store sales computation. The change in same store customer count is similarly computed, but is based upon the number of retail transactions reported in the Company’s point-of-sale system.

For wholesale sales, “average weekly number of doors” represents the average number of customer locations to which product deliveries were made during a week, and “average weekly sales per door” represents the average weekly sales to each such location.

Systemwide sales, a non-GAAP financial measure, include sales by both Company and franchise Krispy Kreme stores. The Company believes systemwide sales data are useful in assessing consumer demand for the Company’s products, the overall success of the Krispy Kreme brand and, ultimately, the performance of the Company. All of the Company’s royalty revenues are computed as percentages of sales made by the Company’s domestic and international franchisees, and substantially all of KK Supply Chain’s external sales of doughnut mixes and other ingredients ultimately are determined by demand for the Company’s products at franchise stores. Accordingly, sales by the Company’s franchisees have a direct effect on the Company’s royalty and KK Supply Chain revenues, and therefore on the Company’s profitability. The Company’s consolidated financial statements appearing elsewhere herein include sales by Company stores, sales to franchisees by the KK Supply Chain business segment, and royalties and fees received from franchise stores based on their sales, but exclude sales by franchise stores to their customers.

The following table sets forth data about the number of systemwide stores as of May 5, 2013 and April 29, 2012.

	May 5,	April 29,
	2013	2012
Number of Stores Open At Period End:
Company stores:
Factory:
Commissaries	7	7
Dual-channel stores	34	35
On-premises only stores	33	30
Satellite stores	21	20
Total Company stores	95	92
Domestic Franchise stores:
Factory stores	102	102
Satellite stores	44	40
Total Domestic Franchise stores	146	142
International Franchise stores:
Factory stores	121	115
Satellite stores	411	343
Total International Franchise stores	532	458
Total systemwide stores	773	692

25

The following table sets forth data about the number of store operating weeks for the three months ended May 5, 2013 and April 29, 2012.

	Three Months Ended
	May 5,	April 29,
	2013	2012
Store Operating Weeks:
Company stores:
Factory stores:
Commissaries	91	91
Dual-channel stores	448	455
On-premises only stores	413	390
Satellite stores	266	260
Domestic Franchise stores:(1)
Factory stores	1,307	1,314
Satellite stores	560	519
International Franchise stores:(1)
Factory stores	1,385	1,313
Satellite stores	5,132	4,268

(1)       Metrics for the three months ended May 5, 2013 and April 29, 2012 include only stores open at the respective period end.

     The following table sets forth the types and locations of Company stores as of May 5, 2013.

	Number of Company Stores
	Factory
State	Stores	Hot Shops	Fresh Shops	Total
Alabama	3	-	-	3
District of Columbia	-	1	-	1
Florida	4	-	-	4
Georgia	7	5	-	12
Indiana	3	1	-	4
Kansas	2	-	-	2
Kentucky	3	1	-	4
Louisiana	1	-	-	1
Maryland	2	-	-	2
Michigan	3	-	-	3
Mississippi	1	-	-	1
Missouri	1	-	-	1
New York	-	-	1	1
North Carolina	13	4	-	17
Ohio	6	-	-	6
South Carolina	5	3	-	8
Tennessee	10	3	-	13
Texas	3	-	-	3
Virginia	6	2	-	8
West Virginia	1	-	-	1
Total	74	20	1	95

26

     Changes in the number of Company stores during the three months ended May 5, 2013 and April 29, 2012 are summarized in the table below.

	Number of Company Stores
	Factory
	Stores		Hot Shops	Fresh Shops	Total
Three months ended May 5, 2013
February 3, 2013	76		20	1	97
Opened	1		-	-	1
Closed	-		-	-	-
Transferred to Domestic Franchise	(3	)	-	-	(3	)
May 5, 2013	74		20	1	95
Three months ended April 29, 2012
January 29, 2012	72		19	1	92
Opened	-		-	-	-
Closed	-		-	-	-
April 29, 2012	72		19	1	92

27

     The following table sets forth the types and locations of domestic franchise stores as of May 5, 2013.

	Number of Domestic Franchise Stores
	Factory
State	Stores	Hot Shops	Fresh Shops	Total
Alabama	5	3	-	8
Arizona	1	3	-	4
Arkansas	2	-	-	2
California	15	1	4	20
Colorado	2	-	-	2
Connecticut	1	-	3	4
Florida	12	7	1	20
Georgia	5	3	-	8
Hawaii	1	-	-	1
Idaho	1	-	-	1
Illinois	3	-	-	3
Iowa	1	-	-	1
Kansas	1	-	-	1
Louisiana	2	-	-	2
Mississippi	3	1	-	4
Missouri	4	1	-	5
Nebraska	1	-	1	2
Nevada	3	-	2	5
New Jersey	-	1	-	1
New Mexico	1	1	1	3
North Carolina	7	1	-	8
Oklahoma	2	-	-	2
Oregon	2	-	-	2
Pennsylvania	4	3	1	8
South Carolina	6	2	1	9
Tennessee	1	-	-	1
Texas	7	2	-	9
Utah	2	-	-	2
Washington	6	-	-	6
Wisconsin	1	1	-	2
Total	102	30	14	146

28

Changes in the number of domestic franchise stores during the three months ended May 5, 2013 and April 29, 2012 are summarized in the table below.

	Number of Domestic Franchise Stores
	Factory
	Stores		Hot Shops		Fresh Shops		Total
Three months ended May 5, 2013
February 3, 2013	99		29		14		142
Opened	-		1		-		1
Closed	-		-		-		-
Transferred from Company Stores	3		-		-		3
May 5, 2013	102		30		14		146
Three months ended April 29, 2012
January 29, 2012	102		25		15		142
Opened	1		2		-		3
Closed	(1	)	(1	)	(1	)	(3	)
April 29, 2012	102		26		14		142

29 

     The types and locations of international franchise stores as of May 5, 2013 are summarized in the table below.

	Number of International Franchise Stores
	Fiscal
	Year First	Factory
Country	Store Opened	Stores	Hot Shops	Fresh Shops	Kiosks	Total
Australia	2004	5	1	6	6	18
Bahrain	2009	1	-	1	-	2
Canada	2002	4	-	2	-	6
China	2010	1	-	1	-	2
Dominican Republic	2011	1	-	2	-	3
India	2013	1	-	-	-	1
Indonesia	2007	1	-	3	7	11
Japan	2007	17	-	27	-	44
Kuwait	2007	2	-	5	6	13
Lebanon	2009	2	-	5	1	8
Malaysia	2010	2	-	1	5	8
Mexico	2004	7	1	37	54	99
Philippines	2007	6	3	25	8	42
Puerto Rico	2009	5	-	-	-	5
Qatar	2008	2	-	-	-	2
Saudi Arabia	2008	10	-	68	21	99
South Korea	2005	34	-	37	-	71
Thailand	2011	3	2	2	2	9
Turkey	2010	1	-	11	7	19
United Arab Emirates	2008	2	-	8	5	15
United Kingdom	2004	14	2	30	9	55
Total		121	9	271	131	532

30

     Changes in the number of international franchise stores during the three months ended May 5, 2013 and April 29, 2012 are summarized in the table below.

	Number of International Franchise Stores
	Factory
	Stores		Hot Shops	Fresh Shops		Kiosks		Total
Three months ended May 5, 2013
February 3, 2013	120		9	257		123		509
Opened	3		-	16		8		27
Closed	(2	)	-	(2	)	-		(4	)
May 5, 2013	121		9	271		131		532
Three months ended April 29, 2012
January 29, 2012	118		11	226		105		460
Opened	-		-	14		6		20
Closed	(3	)	-	(10	)	(9	)	(22	)
Change in store type	-		-	(7	)	7		-
April 29, 2012	115		11	223		109		458

Three months ended May 5, 2013 compared to three months ended April 29, 2012

Overview

Total revenues rose by 11.2% to $120.6 million for the three months ended May 5, 2013 compared to $108.5 million for the three months ended April 29, 2012. Consolidated operating income increased to $15.2 million from $10.8 million and consolidated net income was $8.0 million compared to $6.0 million.

31

Revenues by business segment (expressed in dollars and as a percentage of total revenues) are set forth in the table below (percentage amounts may not add to totals due to rounding).

	Three Months Ended
	May 5,				April 29,
	2013				2012
	(Dollars in thousands)
Revenues by business segment:
Company Stores	$	81,921			$	73,341
Domestic Franchise		2,871				2,633
International Franchise		6,445				6,027
KK Supply Chain:
Total revenues		59,811				53,785
Less - intersegment sales elimination		(30,423	)			(27,290	)
External KK Supply Chain revenues		29,388				26,495
Total revenues	$	120,625			$	108,496
Segment revenues as a percentage of total revenues:
Company Stores		67.9		%		67.6		%
Domestic Franchise		2.4				2.4
International Franchise		5.3				5.6
KK Supply Chain (external sales)		24.4				24.4
		100.0		%		100.0		%
Segment operating results:
Company Stores	$	5,314			$	2,948
Domestic Franchise		1,439				1,569
International Franchise		4,531				4,494
KK Supply Chain		10,239				8,477
Total segment operating income		21,523				17,488
General and administrative expenses		(6,055	)			(6,458	)
Corporate administrative depreciation expense		(276	)			(165	)
Impairment charges and lease termination costs		(8	)			(31	)
Consolidated operating income		15,184				10,834
Interest income		61				27
Interest expense		(437	)			(398	)
Equity in losses of equity method franchisees		(53	)			(50	)
Other non-operating income and (expense), net		(5	)			78
Income before income taxes		14,750				10,491
Provision for income taxes		6,751				4,465
Consolidated net income	$	7,999			$	6,026

Adjusted Net Income

     The Company has approximately $206 million of federal net operating loss carryovers, as well as loss carryovers for state income tax purposes. Until such time as the Company’s net operating loss carryovers are exhausted or expire, GAAP income tax expense is expected to substantially exceed the amount of cash income taxes payable by the Company.

32

The following non-GAAP financial information and related reconciliation to GAAP measures are provided to assist the reader in understanding the material difference between the Company’s income tax expense and income taxes currently payable. These non-GAAP performance measures are consistent with other measurements made by management in the operation of the business which do not consider income taxes except to the extent to which those taxes currently are payable, for example, capital allocation decisions and incentive compensation measurements that are made on a pretax basis.

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands, except per share
	amounts)
Net income, as reported	$	7,999	$	6,026
Provision for deferred income taxes		6,105		4,234
Adjusted net income	$	14,104	$	10,260
Adjusted earnings per common share:
Basic	$	0.21	$	0.15
Diluted	$	0.20	$	0.14
Weighted average shares outstanding:
Basic		67,012		69,562
Diluted		70,578		71,888

   Results of Operations

A discussion of the revenues and operating results of each of the Company’s four business segments follows, together with a discussion of income statement line items not associated with specific segments.

33

Company Stores

The components of Company Stores revenues and expenses (expressed in dollars and as a percentage of total revenues) are set forth in the table below (percentage amounts may not add to totals due to rounding).

					Percentage of Total Revenues
	Three Months Ended				Three Months Ended
	May 5,		April 29,		May 5,		April 29,
	2013		2012		2013		2012
	(In thousands)
Revenues:
On-premises sales:
Retail sales	$	36,017	$	30,596	44.0	%	41.7	%
Fundraising sales		4,777		4,880	5.8		6.7
Total on-premises sales		40,794		35,476	49.8		48.4
Wholesale sales:
Grocers/mass merchants		25,234		22,740	30.8		31.0
Convenience stores		14,891		14,322	18.2		19.5
Other wholesale		1,002		803	1.2		1.1
Total wholesale sales		41,127		37,865	50.2		51.6
Total revenues		81,921		73,341	100.0		100.0
Operating expenses:
Cost of sales:
Food, beverage and packaging		30,366		27,797	37.1		37.9
Shop labor		13,774		12,782	16.8		17.4
Delivery labor		6,297		5,907	7.7		8.1
Employee benefits		5,346		4,998	6.5		6.8
Total cost of sales		55,783		51,484	68.1		70.2
Vehicle costs(1)		4,423		4,486	5.4		6.1
Occupancy(2)		2,562		2,414	3.1		3.3
Utilities expense		1,406		1,414	1.7		1.9
Depreciation and amortization expense		2,354		2,097	2.9		2.9
Other operating expenses		5,294		4,762	6.5		6.5
Total store level costs		71,822		66,657	87.7		90.9
Store operating income		10,099		6,684	12.3		9.1
Other segment operating costs(3)		3,710		2,661	4.5		3.6
Allocated corporate overhead		1,075		1,075	1.3		1.5
Segment operating income	$	5,314	$	2,948	6.5	%	4.0	%

(1)	Includes fuel, maintenance and repairs, rent, taxes and other costs of operating the delivery fleet, exclusive of depreciation.
(2)	Includes rent, property taxes, common area maintenance charges, insurance, building maintenance and other occupancy costs, exclusive of utilities and depreciation.
(3)	Includes marketing costs not charged to stores, segment management costs, wholesale selling expenses and support functions.

     A reconciliation of Company Stores segment sales from the first quarter of fiscal 2013 to the first quarter of fiscal 2014 follows:

	On-Premises			Wholesale			Total
	(In thousands)
Sales for the three months ended April 29, 2012	$	35,476		$	37,865		$	73,341
Fiscal 2013 sales at closed stores		(192	)		-			(192	)
Fiscal 2013 sales at stores refranchised in fiscal 2014		(852	)		(1,118	)		(1,970	)
Fiscal 2014 sales at stores refranchised in fiscal 2014		189			174			363
Increase in sales at established stores (open stores only)		3,263			3,778			7,041
Increase in sales at stores opened in fiscal 2013		2,163			-			2,163
Sales at stores acquired in fiscal 2013		581			428			1,009
Sales at stores opened in fiscal 2014		166			-			166
Sales for the three months ended May 5, 2013	$	40,794		$	41,127		$	81,921

34

     Sales at Company Stores increased to $81.9 million in the first quarter of fiscal 2014 from $73.3 million in the first quarter of fiscal 2013. Selling price increases in the on-premises channel accounted for approximately 1.4 percentage points of the increase in sales, exclusive of the effects of higher pricing on unit volumes; such effects are difficult to measure reliably. As with all consumer products, however, higher prices may negatively affect unit volumes, which may negatively affect sales.

The following table presents sales metrics for Company stores:

	Three Months Ended
	May 5,				April 29,
	2013				2012
On-premises:
Change in same store sales		11.4		%		2.1		%
Change in same store customer count (retail sales only)		10.3		%		1.3		%
Average guest check (retail sales only)	$	7.33			$	7.14
Wholesale:
Grocers/mass merchants:
Change in average weekly number of doors		(4.2	)	%		(4.5	)	%
Change in average weekly sales per door		15.8		%		8.2		%
Convenience stores:
Change in average weekly number of doors		(2.6	)	%		(10.6	)	%
Change in average weekly sales per door		7.3		%		14.8		%

On-premises sales

The components of the change in same store sales at Company stores are as follows:

	Three Months Ended
	May 5,			April 29,
	2013			2012
Change in same store sales:
Retail pricing	3.0		%	2.6		%
Guest check average (exclusive of the effects of pricing)	(0.2	)		(1.7	)
Customer count	8.7			1.1
Other	(0.1	)		0.1
Total	11.4		%	2.1		%

On-premises sales increased 15.0% to $40.8 million in the first three months of fiscal 2014 from $35.5 million in the first three months of fiscal 2013, driven principally by higher customer traffic and retail price increases. The Company is developing and implementing new and enhanced marketing programs designed to increase guest visit frequency. In addition to improved marketing programs, management believes that customer traffic has been positively affected by ongoing store remodelings, an emphasis on hospitality, and continued use of creative limited time doughnut offerings. Additionally, approximately 3.0 percentage points of the on-premises sales increase reflects retail price increases implemented in the first quarter of fiscal 2014. On February 18, 2013, the Company implemented on-premises price increases at substantially all its stores designed to help offset the rising costs of doughnut mixes, other ingredients and fuel resulting from higher commodity prices. These price increases affect items comprising approximately 70% of on-premises sales, and the average price increase on these items was approximately 5%.

Wholesale distribution

Sales to wholesale accounts increased 8.6% to $41.1 million in the first three months of fiscal 2014 from $37.9 million in the first three months of fiscal 2013.

Sales to grocers and mass merchants increased 11.0% to $25.2 million, with a 15.8% increase in average weekly sales per door partially offset by a 4.2% decline in the average number of doors served. The Company believes that average weekly sales per door in the grocer/mass merchant channel have grown as a result of, among other things, improved customer service, introduction of additional price points, and the addition of new relatively higher volume doors. The decline in the average number of doors served in the grocery/mass merchant channel reflects the elimination of loose doughnut sales at a regional grocer, although the Company continues to sell packaged products to this customer as well as a program change with another customer to include only a select number of doors. Sales of loose unpackaged products comprised approximately 1% of sales to grocery/mass merchant customers for the three months ended May 5, 2013, with the balance comprised of sales of packaged products.

35

     Convenience store sales rose 4.0% to $14.9 million, reflecting a 7.3% increase in the average weekly sales per door, partially offset by a 2.6% decline in the average number of doors served. The decline in the average number of doors served in the convenience store channel reflects a reduction in the number of stops at relatively low volume doors, as well as the loss of a regional convenience store account. Sales of loose unpackaged products comprised approximately 78% of sales to convenience store customers for the three months ended May 5, 2013, with the balance comprised of sales of packaged products.

Costs and expenses

Total cost of sales as a percentage of revenues decreased by 2.1 percentage points from the first three months of fiscal 2013 to 68.1% of revenues in the first three months of fiscal 2014.

The cost of food, beverage and packaging as a percentage of revenues decreased by 0.8 percentage points in the first three months of fiscal 2014 compared to the first three months of fiscal 2013. Price increases in the on-premises distribution channel more than offset modest increases in the cost of food, beverage and packaging. In addition, a reduction in returns in the wholesale distribution channel and a greater percentage of sales derived from on-premises customers compared to last year contributed to the improvement. The cost of food, beverage and packaging as a percentage of sales is often greater in the wholesale distribution channel compared to the on-premises channel because average product selling prices generally are lower in the wholesale distribution channel and because of the effect of returns in the wholesale distribution channel.

KK Supply Chain has entered into contracts to purchase approximately 90% of its shortening and flour requirements, and substantially all of its estimated sugar requirements for the balance of fiscal 2014. Based upon current market forecasts, the Company expects its aggregate cost of ingredients and packaging to rise modestly over the balance of fiscal 2014 compared to the comparable period of fiscal 2013, and expects to recover these higher costs through price increases or cost reduction measures. The Company’s contracts for sugar also cover substantially all of its estimated fiscal 2015 requirements.

Shop labor as a percentage of revenues declined by 0.6 percentage points from the first three months of fiscal 2013 to 16.8% of revenues in the first three months of fiscal 2014, principally due to higher revenues and a shift in sales mix toward on-premises sales compared to the prior year.

Delivery labor as a percentage of revenues declined by 0.4 percentage points from the first three months of fiscal 2013 to 7.7% of revenues in the first three months of fiscal 2014, principally due to a reduction in wholesale sales as a percentage of total Company Stores sales.

Vehicle costs as a percentage of revenues decreased from 6.1% of revenues in the first three months of fiscal 2013 to 5.4% of revenues in the first three months of fiscal 2014, principally due to higher sales resulting from volume increases, lower fuel costs due to a reduction in mileage as a result of account rationalization, and an increase in average weekly sales per door which generally results in reduced transportation costs per sales dollar.

Many segment operating costs are fixed or semi-fixed in nature and, accordingly, segment profit margins are sensitive to changes in sales volumes.

Depreciation expense was flat at 2.9% of sales in the first three months of fiscal 2014 and the first three months of fiscal 2013. Depreciation expense increased to $2.4 million in the first three months of fiscal 2014 compared to $2.1 million in first three months of fiscal 2013 due to increased capital expenditures, including construction of new stores, store refurbishment efforts on existing stores and investments in information technology systems.

Other segment operating costs increased to 4.5% of revenues in the first three months of fiscal 2014 from 3.6% of revenues in the first three months of fiscal 2013, reflecting an increase in legal costs of approximately $400,000 related principally to the litigation associated with Company’s former landlord in Lorton, Virginia, described in Note 7 to the consolidated financial statements appearing elsewhere herein.

The Patient Protection and Affordable Care Act (the “Act”) requires businesses employing fifty or more full-time equivalent employees to offer health care benefits to those full-time employees beginning in January 2014, or be subject to an annual penalty. Those benefits must be provided under a health care plan which provides a certain minimum scope of health care services. The Act limits the portion of the cost of the benefits which the Company can require employees to pay.

The Company currently employs a substantial number of persons to whom the Company does not currently provide health care benefits but who could be entitled to receive health care benefits under the Act. The Company does not know the amount by which its costs will increase assuming the above provisions of the Act are implemented in January 2014 because, among other reasons, many of the specifics relating to implementation, including certain of the specifics of the coverage required to be offered, are to be contained in regulations which have not yet been drafted. In addition, the Company does not know how many of the potentially newly-eligible employees will elect to obtain coverage under the Act.

However, based on information currently available to the Company and the Company’s analyses to-date and its current cost estimates, management currently does not expect that the aggregate incremental cost of providing health care coverage prescribed by the Act will exceed its current costs by more than approximately $5 million annually. The Company currently believes its incremental costs will be less than such amount, and may be substantially less. The Company is continuing to study and evaluate the requirements of the Act, and the Company’s estimate of the additional cost of providing benefits mandated by the Act is expected to change as the Company gains additional information and makes decisions affecting its implementation of the Act’s requirements.

36

   Domestic Franchise

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Revenues:
Royalties	$	2,739	$	2,437
Development and franchise fees		25		88
Other		107		108
Total revenues		2,871		2,633
Operating expenses:
Segment operating expenses		1,318		909
Depreciation expense		14		55
Allocated corporate overhead		100		100
Total operating expenses		1,432		1,064
Segment operating income	$	1,439	$	1,569

     Domestic Franchise revenues increased 9.0% to $2.9 million in the first quarter of fiscal 2014 from $2.6 million in the first quarter of fiscal 2013. The increase reflects higher domestic royalty revenues resulting from an increase in sales by domestic franchise stores from $72 million in the first quarter of fiscal 2013 to $81 million in the first quarter of fiscal 2014. Domestic Franchise same store sales rose 11.3% in the first quarter of fiscal 2014.

Domestic Franchise operating expenses include costs to recruit new domestic franchisees, to assist in domestic store openings, and to monitor and aid in the performance of domestic franchise stores, as well as allocated corporate costs. Domestic Franchise operating expenses in the first quarter of fiscal 2014 reflect increased costs related to the addition of new personnel hired in the fourth quarter of fiscal 2013 and other costs associated with the execution of the Company’s domestic franchise expansion program. The Company expects to continue to incur additional franchise costs in connection with management’s plan to reengage in franchise expansion efforts to drive domestic franchise unit growth.

Domestic franchisees opened one store in the first quarter of fiscal 2014. On February 22, 2013, a new domestic franchisee who was a former employee of the Company acquired three Krispy Kreme stores from the Company as more fully described in Note 12 to the consolidated financial statements appearing elsewhere herein. As of May 5, 2013, existing development and franchise agreements for territories in the United States provide for the development of approximately 50 additional stores through fiscal 2020. Royalty revenues are directly related to sales by franchise stores and, accordingly, the success of franchisees’ operations has a direct effect on the Company’s revenues, results of operations and cash flows.

International Franchise

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Revenues:
Royalties	$	6,050	$	5,742
Development and franchise fees		395		285
Total revenues		6,445		6,027
Operating expenses:
Segment operating expenses		1,611		1,230
Depreciation expense		3		3
Allocated corporate overhead		300		300
Total operating expenses		1,914		1,533
Segment operating income	$	4,531	$	4,494

37

International Franchise royalties increased 5.4%, driven by an increase in sales by international franchise stores from $105 million in the first quarter of fiscal 2013 to $110 million in the first quarter of fiscal 2014. Changes in the rates of exchange between the U.S. dollar and the foreign currencies in which the Company’s international franchisees do business decreased sales by international franchisees measured in U.S. dollars by approximately $3.7 million in the first quarter of fiscal 2014 compared to the first quarter of fiscal 2013, which adversely affected international royalty revenues by approximately $220,000.

     International Franchise same store sales, measured on a constant currency basis to remove the effects of changing exchange rates between foreign currencies and the U.S. dollar (“constant dollar same store sales”), fell 7.3%. The decline in International Franchise same store sales reflects, among other things, waning honeymoon effects from the large number of new stores opened internationally in recent years and the cannibalization effects on initial stores in new markets of additional store openings in those markets. “Cannibalization effect” means the tendency for new stores to become successful, in part or in whole, by “shifting” sales from existing stores in the same market. “Honeymoon effect” means the common pattern for many start-up restaurants in which a flurry of activity due to start-up publicity and natural curiosity is followed by a decline during which a steady repeat customer base develops.

Constant dollar same store sales in established markets increased 4.7% in the first quarter of fiscal 2014 and fell 17.1% in new markets. “Established markets” means countries in which the first Krispy Kreme store opened before fiscal 2007. Sales at stores in established markets comprised approximately 51% of aggregate constant dollar same store sales for the first quarter of fiscal 2014. While the Company considers countries in which Krispy Kreme first opened before fiscal 2007 to be established markets, franchisees in those markets continue to develop their business. Of the 490 international shops currently in operation that opened since the beginning of fiscal 2007, 207 shops are in these established markets.

International Franchise operating expenses include costs to recruit new international franchisees, to assist in international store openings, and to monitor and aid in the performance of international franchise stores, as well as allocated corporate costs. International Franchise operating expenses increased to $1.9 million in the first quarter of fiscal 2014 compared to $1.5 million in the first quarter of fiscal 2013, principally reflecting higher personnel and personnel-related costs to support continuing and anticipated international growth, as well as a provision for potential uncollectible accounts of approximately $120,000. Management expects International Franchise operating expenses to continue to rise in the balance of fiscal 2014 compared to the comparable period of fiscal 2013 due to personnel additions to support international franchise growth, as well as anticipated fiscal 2014 shop openings in new markets which typically require a greater level of franchisor support than openings in existing markets.

International franchisees opened 27 stores and closed four stores in the first quarter of fiscal 2014. As of May 5, 2013, existing development and franchise agreements for territories outside the United States provide for the development of approximately 360 additional stores through fiscal 2019. Royalty revenues are directly related to sales by franchise stores and, accordingly, the success of franchisees’ operations has a direct effect on the Company’s revenues, results of operations and cash flows.

KK Supply Chain

The components of KK Supply Chain revenues and expenses (expressed in dollars and as a percentage of total revenues before intersegment sales elimination) are set forth in the table below (percentage amounts may not add to totals due to rounding).

38

						Percentage of Total Revenues
						Before Intersegment
						Sales Elimination
	Three Months Ended					Three Months Ended
	May 5,		April 29,			May 5,		April 29,
	2013		2012			2013		2012
	(In thousands)
Revenues:
Doughnut mixes	$	21,460	$	19,207		35.9	%	35.7		%
Other ingredients, packaging and supplies		34,862		32,650		58.3		60.7
Equipment		2,677		1,204		4.5		2.2
Fuel surcharge		812		724		1.4		1.3
Total revenues before intersegment sales elimination		59,811		53,785		100.0		100.0
Operating expenses:
Cost of sales:
Cost of goods produced and purchased		40,460		36,966		67.6		68.7
(Gain) loss on agricultural derivatives		170		(51	)	0.3		(0.1	)
Inbound freight		1,625		1,466		2.7		2.7
Total cost of sales		42,255		38,381		70.6		71.4
Distribution costs		3,873		3,627		6.5		6.7
Other segment operating costs		2,971		2,838		5.0		5.3
Depreciation expense		173		162		0.3		0.3
Allocated corporate overhead		300		300		0.5		0.6
Total operating costs		49,572		45,308		82.9		84.2
Segment operating income	$	10,239	$	8,477		17.1	%	15.8		%

     KK Supply Chain revenues before intersegment sales elimination increased 11.2% in the first three months of fiscal 2014 compared to the first three months of fiscal 2013.

Sales of doughnut mixes rose 11.7% year-over-year in the first three months of fiscal 2014, reflecting higher unit volumes and higher selling prices resulting from an increase in raw materials costs.

Sales of other ingredients, packaging and supplies, made principally to Company and Domestic Franchise stores, rose 6.8% year-over-year in the first three months of fiscal 2014 principally due to higher selling prices and higher unit volumes reflecting higher sales at Company and franchise shops.

Equipment sales increased to $2.7 million in the first three months of fiscal 2014 from $1.2 million due to increased equipment sales for new store openings and anticipated store openings, along with increased sales of replacement parts.

KK Supply Chain utilizes a fuel surcharge program to recoup additional freight costs resulting from increases in fuel costs. Charges under the program are based upon the price of diesel fuel.

KK Supply Chain cost of sales decreased to 70.6% of revenues in the first three months of fiscal 2014 compared to 71.4% of revenues in the first three months of the preceding fiscal year. The cost of goods produced and purchased fell 1.1 percentage points, approximately half of which was due to lower provisions for obsolete and excess equipment inventories.

KK Supply Chain had net losses on agricultural derivative positions of $170,000 in the first quarter of fiscal 2014 compared to net gains of $51,000 in the first quarter of fiscal 2013. The Company has not designated any of its derivative positions as cash flow hedges and accordingly, changes in the market value of those positions are reflected in earnings as they occur.

Other segment operating costs include segment management, purchasing, customer service and support, laboratory and quality control costs, and research and development expenses. These costs reflect a reduction in bad debt expense of approximately $140,000 in the first three months of fiscal 2014 compared to the first three months of fiscal 2013. The reduction in bad debt expense principally relates to a bad debt provision recorded in the first three months of fiscal 2013 related to a specific franchisee who filed for bankruptcy ; such bad debt was recovered in the fourth quarter of fiscal 2013 when the franchisee’s operations were acquired by another franchisee which paid the past due amounts in connection with the acquisition of the franchise.

39

     Franchisees opened 28 stores and closed four stores in the first three months of fiscal 2014. A substantial portion of KK Supply Chain’s revenues are directly related to sales by franchise stores and, accordingly, the success of franchisees’ operations has a direct effect on the Company’s revenues, results of operations and cash flows.

A significant portion of franchise store sales is attributable to sales by franchisees outside the United States. The Company sells doughnut mixes, either manufactured by the Company in the United States or blended by contract mix manufacturers using concentrates supplied by the Company, to all its international franchisees. Most of these franchisees purchase substantially all other ingredients, packaging and supplies through sourcing arrangements approved by the Company. Accordingly, KK Supply Chain revenues are less correlated with sales by international franchisees than with sales by domestic franchisees, which purchase substantially all of their ingredients from KK Supply Chain. Like all international businesses, the Company and its international franchisees must address the risks of international trade, including taxes, tariffs, duties and transportation costs, which can affect the franchisees’ product costs and therefore indirectly affect the pace of development. The Company, in cooperation with its international franchisees, continually seeks to mitigate the impact of these factors. For example, the Company has developed premix and concentrate doughnut mix production models, and has been continuously pursuing alternative sourcing arrangements in various markets.

General and Administrative Expenses

General and administrative expenses decreased to $6.1 million in the first quarter of fiscal 2014 from $6.5 million in the first quarter of fiscal 2013, and as a percentage of total revenues decreased to 5.0% from 6.0%, respectively.

The decrease in general and administrative expenses in the first quarter of fiscal 2014 compared to the first quarter of fiscal 2013 reflects a decrease in share-based compensation of $557,000. Share-based compensation expense in the first quarter of fiscal 2013 included approximately $600,000 related principally to a January 2012 grant to an executive officer who achieved retirement eligibility under the terms of the Company’s stock compensation plan in the first quarter of fiscal 2013. Share-based payment awards to retirement eligible persons are charged to expense over the period from the grant date to the date of retirement eligibility rather than being amortized over the four-year vesting period of the awards, which has the effect of accelerating the recognition of the expense associated with awards to such persons as they approach retirement eligibility.

In addition, provisions for incentive compensation rose $400,000 in the first quarter of fiscal 2014. General and administrative expenses in the first quarter of fiscal 2014 include approximately $1.0 million of incentive compensation provisions to reflect fiscal 2014 operating results (with an additional charge of approximately $1.2 million included in direct operating expenses) compared to $600,000 of incentive compensation in the first quarter of fiscal 2013 (with an additional charge of approximately $600,000 included in direct operating expenses).

Impairment Charges and Lease Termination Costs

Impairment charges and lease termination costs were $8,000 in the first three months of fiscal 2014 compared to $31,000 in the first three months of fiscal 2013.

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Impairment of long-lived assets	$	-	$	-
Lease termination costs		8		31
	$	8	$	31

The Company tests long-lived assets for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. These events and changes in circumstances include store closing and refranchising decisions, the effects of changing costs on current results of operations, observed trends in operating results, and evidence of changed circumstances observed as a part of periodic reforecasts of future operating results and as part of the Company’s annual budgeting process. Impairment charges generally relate to Company stores expected to be closed or refranchised, as well as to stores management believes will not generate sufficient future cash flows to enable the Company to recover the carrying value of the stores’ assets, but which management has not yet decided to close. When the Company concludes that the carrying value of long-lived assets is not recoverable (based on future projected undiscounted cash flows), the Company records impairment charges to reduce the carrying value of those assets to their estimated fair values. The fair values of these assets are estimated based on the present value of estimated future cash flows, on independent appraisals and, in the case of assets the Company currently is negotiating to sell, based on the Company’s negotiations with unrelated third-party buyers.

40

     Lease termination costs represent the estimated fair value of liabilities related to unexpired leases, after reduction by the amount of accrued rent expense, if any, related to the leases, and are recorded when the lease contracts are terminated or, if earlier, the date on which the Company ceases use of the leased property. The fair value of these liabilities were estimated as the excess, if any, of the contractual payments required under the unexpired leases over the current market lease rates for the properties, discounted at a credit-adjusted risk-free rate over the remaining term of the leases. The provision for lease termination costs also includes adjustments to liabilities recorded in prior periods arising from changes in estimated sublease rentals and from settlements with landlords.

The Company intends to refranchise certain geographic markets, expected to consist principally of, but not necessarily limited to, markets outside the Company’s traditional base in the Southeastern United States. The franchise rights and other assets in many of these markets were acquired by the Company in business combinations in prior years.

From the beginning of fiscal 2009 through fiscal 2013, the Company has refranchised a total of 11 stores and received consideration totaling $2.5 million in connection with those transactions. During this period, the Company recorded impairment charges totaling approximately $490,000 related to completed and anticipated refranchisings.

On February 22, 2013, the Company refranchised three stores in the Kansas/Missouri market; the Company closed a fourth store in the market in January 2013 in anticipation of the transaction. The four stores had total sales of approximately $9 million in fiscal 2013. The Company did not record a significant gain or loss on the refranchising transaction.

The Company cannot predict the likelihood of refranchising any additional stores or markets or the amount of proceeds, if any, which might be received therefrom, including the amounts which might be realized from the sale of store assets and the execution of any related franchise agreements. Asset dispositions associated with future refranchisings could result in the recognition of impairment losses on the related assets.

Interest Expense

The components of interest expense are as follows:

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Interest accruing on outstanding term loan indebtedness	$	153	$	187
Letter of credit and unused revolver fees		74		75
Amortization of cost of interest rate derivatives		19		2
Amortization of deferred financing costs		124		103
Other		67		31
	$	437	$	398

The decrease in interest accruing on outstanding indebtedness reflects the reduction in the principal outstanding under the Company’s term loan.

Equity in Income (Losses) of Equity Method Franchisees

The Company recorded equity in the losses of equity method franchisees of $53,000 in the first quarter of fiscal 2014 compared to losses of $50,000 in the first quarter of fiscal 2013. This caption represents the Company’s share of operating results of equity method franchisees which develop and operate Krispy Kreme stores.

Provision for Income Taxes

The Company’s effective income tax rate was 45.8% for the three months ended May 5, 2013 compared to 42.6% for the three months ended April 29, 2012.

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     The provision for income taxes for the three months ended May 5, 2013 includes a charge of approximately $575,000 to correct an error in accruals for uncertain tax positions that originated in the fourth quarter of fiscal 2012. This resulted in an increase in the effective tax rate for the first quarter of fiscal 2014 of 3.9%. The error, which related to a previous misunderstanding of the application of the statute of limitations, and its correction were not material to the results of any period; accordingly, the error was corrected in the first quarter of fiscal 2014 and prior financial statements were not restated.

The portion of the income tax provision representing taxes estimated to be payable currently was $646,000 and $231,000 in the first three months of fiscal 2014 and fiscal 2013, respectively, consisting principally of foreign withholding taxes related to royalties and franchise fees paid to the Company by international franchisees. The current provision for income taxes also reflects adjustments to accruals for uncertain tax positions, including potential interest and penalties which could result from the resolution of such uncertainties.

The Company’s estimated effective income tax rate on GAAP ordinary income for fiscal 2014 is 43%. Management’s estimate of the fiscal 2014 effective income tax rate is subject to revision in subsequent quarters as additional information becomes available.

See Results of Operations – Three months ended May 5, 2013 compared to three months ended April 29, 2012 – “Adjusted Net Income” above for non-GAAP financial information disclosures and related reconciliation to GAAP measures intended to illustrate the material difference between the Company’s income tax expense and income taxes currently payable. These non-GAAP performance measures are consistent with other measurements made by management in the operation of the business which do not consider income taxes except to the extent to which those taxes currently are payable, for example, capital allocation decisions and incentive compensation measurements that are made on a pretax basis.

The Company had valuation allowances against deferred income tax assets of $9.8 million at May 5, 2013 and February 3, 2013, representing the portion of such deferred tax assets which, as of such dates, management estimated would not be realized. Under GAAP, future realization of deferred tax assets is evaluated under a “more likely than not” standard. Realization of net deferred tax assets generally is dependent on generation of taxable income in future periods. From fiscal 2005 until the fourth quarter of fiscal 2012, the Company maintained a valuation allowance on deferred tax assets equal to the entire excess of those assets over the Company’s deferred income tax liabilities because of the uncertainty surrounding the realization of those assets. Such uncertainty arose principally from the substantial losses incurred by the Company from fiscal 2005 though fiscal 2009.

The Company reported a pretax profit of $418,000 in fiscal 2010 and $8.9 million in fiscal 2011. In fiscal 2012, the Company’s pretax profit increased to $30.4 million, inclusive of a $6.2 million non-recurring gain from the Company’s sale of its 30% interest in KK Mexico. After considering all relevant factors having an impact on the likelihood of future realization of the Company’s deferred tax assets, in the fourth quarter of fiscal 2012 management concluded that it was more likely than not that a substantial portion of the Company’s deferred tax assets would be realized in future years and, in accordance with GAAP, reversed $139.6 million of the valuation allowance, with an offsetting credit to the provision for income taxes.

Two of the most significant factors considered by management in reaching its conclusion were that the Company earned a significant pretax profit in both fiscal 2011 and 2012 and the positive trend in the Company’s earnings. In fiscal 2013, the Company’s pretax income rose to $36.3 million.

The evaluation of the amount of net deferred tax assets expected to be realized necessarily involves forecasting the amount of taxable income that will be generated in future years. In addition, because a substantial portion of the Company’s deferred tax assets consist of net operating loss and tax credit carryforwards that are subject to expiration, the specific future periods in which taxable income is generated may have a material effect on the amount of deferred tax assets that ultimately are realized. The Company has forecasted future results using estimates management believes to be reasonable and which are based on objective verifiable evidence. The most important factor considered by management in making its forecast was the Company’s results of operations for fiscal 2011, 2012 and 2013. Assuming the Company generates pretax income in each future year approximating the Company’s average pretax income over that period, management estimates that approximately $116 million of its deferred tax assets will be realized in future periods. The decrease in the amount of deferred income tax assets expected to be realized from January 29, 2012 to February 3, 2013 reflected the realization in fiscal 2013 of approximately $13 million of such assets and the loss of approximately $9.8 million of income tax benefits associated with the expiration in fiscal 2013 of warrants to acquire the Company’s common stock issued in prior years, as more fully described in Note 3 to the Company’s consolidated financial statements in its Annual Report on Form 10-K for the year ended February 3, 2013.

The remaining valuation allowance of $9.8 million represents the portion of the Company’s deferred tax assets management estimates will not be realized in the future. Such assets are associated principally with state net operating loss carryforwards having relatively short carryover periods which are forecasted to expire unused, as well as federal foreign tax credits and federal jobs credit carryforwards forecasted to expire unused.

42

     The realization of deferred income tax assets is dependent on future events. While management believes its forecast of future taxable income is reasonable, actual results inevitably will vary from management’s forecasts. Such variances could result in adjustments to the valuation allowance on deferred tax assets in future periods, and such adjustments could be material to the financial statements.

As described above, in making its estimate of the amount of deferred tax assets which will be realized in future periods, the Company estimated annual future pretax income of approximately $24 million. Based on that estimate, the Company concluded that a valuation allowance on deferred tax assets of $9.8 million was appropriate. A 10% reduction in the amount of assumed future annual pretax income would have had no material effect on management’s determination of the amount of deferred tax valuation allowance. A 20% reduction in the amount of assumed future annual pretax income would have caused management’s determination of the appropriate valuation allowance to increase from $9.8 million to approximately $14.6 million. If the Company’s earnings remain at current levels or continue to increase, it is reasonably likely that management would conclude that its estimate of annual income in future years should increase. For example, if management concluded that a future annual earnings forecast of $34 million, which approximates fiscal 2013 pretax income measured on a 52 week basis, were appropriate, then the amount of the deferred tax valuation allowance would be reduced by approximately $3 million, with an offsetting credit to the provision for income taxes. Management believes that because estimates of future earnings are inherently subjective, and because such estimates necessarily involve forecasting many years into the future, frequent revisions to such estimates should not be expected. While the Company’s results of operations continued to improve in fiscal 2013 and exceeded management’s estimated annual pretax income for future years of $24 million described above, the Company believes that additional evidence is necessary before concluding that the level of pretax income achieved in fiscal 2013 is sustainable on a long-term basis. Management believes that such evidence should include, among other things, at least one additional year, subsequent to fiscal 2013, of pretax profits substantially in excess of $24 million before it would be appropriate for management to revise upward its estimate of future annual pretax income. Management revisited this conclusion as of May 5, 2013, and determined that such conclusion remained appropriate. As a result, absent the occurrence of some event or events not currently known, management does not anticipate adjusting its estimate of future earnings until the end of fiscal 2014, although management will continue to revisit this assessment at the end of each remaining quarter of fiscal 2014 and determine whether such conclusion remains appropriate.

Net Income

The Company reported net income of $8.0 million for the three months ended May 5, 2013 and $6.0 million for the three months ended April 29, 2012.

LIQUIDITY AND CAPITAL RESOURCES

The following table presents a summary of the Company’s cash flows from operating, investing and financing activities for the first three months of fiscal 2014 and fiscal 2013.

	Three Months Ended
	May 5,			April 29,
	2013			2012
	(In thousands)
Net cash provided by operating activities	$	14,393		$	10,364
Net cash provided by (used for) investing activities		(4,663	)		(1,312	)
Net cash used for financing activities		(1,339	)		(1,847	)
Net increase in cash and cash equivalents	$	8,391		$	7,205

Cash Flows from Operating Activities

Net cash provided by operating activities was $14.4 million and $10.4 million in the first three months of fiscal 2014 and fiscal 2013, respectively. Higher cash operating income accounted for a majority of the improvement. Improved operating result generated $18.0 million of operating cash flow in the first quarter of fiscal 2014 compared to $14.6 million in the first quarter of fiscal 2013. In addition, in the first quarter of fiscal 2014, the Company recovered a cash deposit of $2.0 million related to the lease of its corporate headquarters. These cash flow improvements were partially offset by higher inventory levels related to anticipated equipment sales and to a temporary rise in certain inventories related to a change in certain ingredients. The remainder of the change in cash flows from operating activities principally reflects normal fluctuations in working capital.

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Cash Flows from Investing Activities

     Net cash used for investing activities was $4.7 million in the first three months of fiscal 2014 compared to $1.3 million in the first three months of fiscal 2013.

Cash used for capital expenditures increased to $5.5 million in the first three months of fiscal 2014 from $1.3 million in the first three months of fiscal 2013. The components of capital expenditures in the first three months of fiscal 2014 and fiscal 2013 were approximately as follows:

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
New store construction	$	1,395	$	-
Store remodels and betterments		1,261		919
Other store equipment, including vehicles and point-of-sale and handheld equipment		1,448		157
Corporate office remodel		1,058		138
Corporate information technology		75		42
Other		222		61
	$	5,459	$	1,317

The Company currently expects capital expenditures to range from approximately $23 million to $35 million in fiscal 2014. The Company intends to fund these capital expenditures from cash provided by operating activities, from existing cash balances and, to a lesser extent, through leases.

Cash Flows from Financing Activities

Net cash used by financing activities was $1.3 million in the first three months of fiscal 2014, compared to $1.8 million in the first three months of fiscal 2013.

During the first three months of fiscal 2014, the Company repaid approximately $1.6 million of outstanding term loan and capitalized lease indebtedness, consisting of approximately $550,000 of scheduled principal amortization, $930,000 of prepayments from the sale of assets, and $130,000 of prepayments from the proceeds of the exercise of stock options.

During the first three months of fiscal 2013, the Company repaid approximately $545,000 of scheduled principal amortization of outstanding term loan and capitalized lease indebtedness.

On March 27, 2012, the Company’s Board of Directors authorized the repurchase of up to $20 million of the Company’s common stock. Through April 29, 2012, the Company repurchased 255,000 shares at an average cost of $7.27 per share, for a total cost of $1.9 million. Approximately $1.3 million of such repurchases were settled during the first three months of fiscal 2013.

Recent Accounting Pronouncements

In February 2013, the FASB issued guidance requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no material effect on the Company’s consolidated financial statements.

In July 2012, the FASB issued amended accounting guidance regarding indefinite-lived intangible asset impairment testing. The amended guidance permits, but does not require, an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not, the indefinite-lived intangible asset is impaired. This guidance is effective for the Company in fiscal 2014, with early adoption permitted. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no effect on the Company’s consolidated financial statements appearing elsewhere herein.

44

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     There have been no material changes from the disclosures in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in the 2013 Form 10-K.

Item 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of May 5, 2013, the end of the period covered by this Quarterly Report on Form 10-Q, management performed, under the supervision and with the participation of the Company’s chief executive officer and chief financial officer, an evaluation of the effectiveness of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. Based on this evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of May 5, 2013, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

During the quarter ended May 5, 2013, there were no changes in the Company’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

Pending Matters

Except as disclosed below, the Company currently is not a party to any material legal proceedings.

K² Asia Litigation

On April 7, 2009, a Cayman Islands corporation, K² Asia Ventures, and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, its franchisee in the Philippines, and other persons associated with the franchisee. The suit alleges that the Company and the other defendants conspired to deprive the plaintiffs of claimed “exclusive rights” to negotiate franchise and development agreements with prospective franchisees in the Philippines, and seeks unspecified damages. The Company believes that these allegations are false and intends to vigorously defend against the lawsuit.

Colchester Security Litigation

On January 27, 2012, Colchester Security II, LLC, the Company's former landlord in Lorton, Virginia, filed a suit against the Company in the Circuit Court of Fairfax County, Virginia alleging breach of the lease and negligence resulting in property damage at a commissary facility previously operated by the Company. The plaintiff seeks $2.7 million in damages. The Company denies the allegations and intends to pursue counterclaims of approximately $3.0 million relating to indemnity claims and breach of the lease. No liability has been recorded with respect to this matter because management does not believe it is probable that a loss has been incurred. In March 2013, both parties agreed to avail themselves of the Fairfax County Court’s alternate dispute resolution program, and the matter has been set for binding arbitration to commence on June 20, 2013.

Item 1A. RISK FACTORS.

There have been no material changes from the risk factors disclosed in Part I, Item 1A, “Risk Factors,” in the 2013 Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

45

Item 3. DEFAULTS UPON SENIOR SECURITIES.

     None.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

Item 5. OTHER INFORMATION.

None.

Item 6. EXHIBITS.

The exhibits filed with this Quarterly Report on Form 10-Q are set forth in the Exhibit Index on page 56 and are incorporated herein by reference.

46

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Krispy Kreme Doughnuts, Inc.
Date: June 14, 2013	By:	/s/ Douglas R. Muir
	Name:	Douglas R. Muir
	Title:	Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)

47

EXHIBIT INDEX

3	.1	—	Amended Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K filed on April 15, 2010)
3	.2	—	Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed December 15, 2008)
31	.1	—	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31	.2	—	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
32	.1	—	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32	.2	—	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101			The following materials from our Quarterly Report on Form 10-Q for the quarter ended May 5, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statement of Income for the three months ended May 5, 2013 and April 29, 2012; (ii) the Consolidated Statement of Comprehensive Income for the three months ended May 5, 2013, and April 29, 2012; (iii) the Consolidated Balance Sheet as of May 5, 2013 and February 3, 2013; (iv) the Consolidated Statement of Cash Flows for the three months ended May 5, 2013 and April 29, 2012; (v) the Consolidated Statement of Changes in Shareholders’ Equity for the three months ended May 5, 2013 and April 29, 2012; and (vi) the Notes to the Condensed Consolidated Financial Statements**

*     Executive compensation plan or agreement.

**   Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Our SEC file number for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 001-16485.

48

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

     I, James H. Morgan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Krispy Kreme Doughnuts, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 14, 2013

/s/ James H. Morgan

James H. Morgan

Chief Executive Officer

49

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

     I, Douglas R. Muir, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Krispy Kreme Doughnuts, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 14, 2013

/s/ Douglas R. Muir

Douglas R. Muir

Chief Financial Officer

50

EX-32.1

EXHIBIT 32.1

CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

     I, James H. Morgan, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the accompanying Quarterly Report on Form 10-Q of Krispy Kreme Doughnuts, Inc. (the “Company”) for the fiscal quarter ended May 5, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James H. Morgan

James H. Morgan

Chief Executive Officer

Date: June 14, 2013

This certification shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

A signed original of this written statement required by Section 906 has been provided to Krispy Kreme Doughnuts, Inc. and will be retained by Krispy Kreme Doughnuts, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

51

EX-32.2

EXHIBIT 32.2

CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

     I, Douglas R. Muir, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the accompanying Quarterly Report on Form 10-Q of Krispy Kreme Doughnuts, Inc. (the “Company”) for the fiscal quarter ended May 5, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Douglas R. Muir

Douglas R. Muir

Chief Financial Officer

Date: June 14, 2013

This certification shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

A signed original of this written statement required by Section 906 has been provided to Krispy Kreme Doughnuts, Inc. and will be retained by Krispy Kreme Doughnuts, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

52

XML

Fair Value Measurements

3 Months Ended

May 05, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 10 — Fair Value Measurements

The accounting standards for fair value measurements define fair value as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

The accounting standards for fair value measurements establish a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

• Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
• Level 2 - Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement of the assets or liabilities. These include certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis at May 5, 2013 and February 3, 2013.

		May 5, 2013
		Level 1		Level 2		Level 3
		(In thousands)
Assets:
	401(k) mirror plan assets	$	2,147	$	-	$	-
	Agricultural commodity futures contracts		175		-		-
	Interest rate derivative		-		7		-
	Total assets	$	2,322	$	7	$	-
		February 3, 2013
		Level 1		Level 2		Level 3
		(In thousands)
Assets:
	401(k) mirror plan assets	$	1,816	$	-	$	-
	Interest rate derivative		-		16		-
	Total assets	$	1,816	$	16	$	-
Liabilities:
	Agricultural commodity futures contracts	$	15	$	-	$	-

The fair value of the interest rate derivative is estimated based on an indicative bid price.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

There were no nonrecurring fair value measurements recorded during the three months ended May 5, 2013 and April 29, 2012.

Fair Values of Financial Instruments at the Balance Sheet Dates

The carrying values and approximate fair values of certain financial instruments as of May 5, 2013 and February 3, 2013 were as follows:

		May 5, 2013				February 3, 2013
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
		(In thousands)
Assets:
	Cash and cash equivalents	$	74,723	$	74,723	$	66,332	$	66,332
	Receivables		26,166		26,166		25,627		25,627
	Receivables from Equity Method Franchisees		745		745		705		705
	Agricultural commodity futures contracts		175		175		-		-
	Interest rate derivatives		7		7		16		16
Liabilities:
	Accounts payable		13,439		13,439		12,198		12,198
	Agricultural commodity futures contracts		-		-		15		15
	Long-term debt (including current maturities)		24,139		24,139		25,743		25,743

The fair value of the term loan is estimated based on an indicative bid price, valuation input Level 2. The carrying values of all other financial instruments approximatetheir fair values at May 5, 2013 and February 3, 2013.

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CONSOLIDATED BALANCE SHEET (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
CURRENT ASSETS:
Cash and cash equivalents	$ 74,723	$ 66,332
Receivables	26,166	25,627
Receivables from equity method franchisees	745	705
Inventories	14,408	12,358
Deferred income taxes	23,223	23,323
Other current assets	5,837	6,439
Total current assets	145,102	134,784
Property and equipment	80,339	78,024
Investments in equity method franchisees	0	0
Goodwill and other intangible assets	24,140	24,195
Deferred income taxes	87,083	93,088
Other assets	10,813	11,847
Total assets	347,477	341,938
CURRENT LIABILITIES:
Current maturities of long-term debt	2,029	2,148
Accounts payable	13,439	12,198
Accrued liabilities	27,985	32,330
Total current liabilities	43,453	46,676
Long-term debt, less current maturities	22,110	23,595
Other long-term obligations and deferred credits	26,262	25,235
Commitments and contingencies
SHAREHOLDERS EQUITY:
Preferred stock, no par value	0	0
Common stock, no par value	355,283	354,068
Accumulated other comprehensive loss	(332)	(338)
Accumulated deficit	(99,299)	(107,298)
Total shareholders equity	255,652	246,432
Total liabilities and shareholders equity	$ 347,477	$ 341,938

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Income taxes

3 Months Ended

May 05, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 3 — Income Taxes

The Company recognizes deferred income tax assets and liabilities based upon management's expectation of the future tax consequences of temporary differences between the income tax and financial reporting bases of assets and liabilities. Deferred tax liabilities generally represent tax expense recognized for which payment has been deferred, or expenses which have been deducted in the Company's tax returns but which have not yet been recognized as an expense in the financial statements. Deferred tax assets generally represent tax deductions or credits that will be reflected in future tax returns for which the Company has already recorded a tax benefit in its consolidated financial statements.

The Company establishes valuation allowances for deferred income tax assets in accordance with GAAP, which provides that such valuation allowances shall be established unless realization of the income tax benefits is more likely than not.

The valuation allowance of $9.8million at May 5, 2013 and February 3, 2013 represents the portion of the Company's deferred tax assets management estimates will not be realized in the future. Such assets are associated principally with state net operating loss and state credit carryforwards having relatively short carryforward periods which are forecasted to expire unused, as well as federal foreign tax credits and federal jobs credit carryforwards forecasted to expire unused.

The realization of deferred income tax assets is dependent on future events. While management believes its forecast of future taxable income is reasonable, actual results inevitably will vary from management's forecasts. Such variances could result in adjustments to the valuation allowance on deferred tax assets in future periods, and such adjustments could be material to the financial statements.

In fiscal 2008, the Company issued warrants to acquire shares of the Company's common stock at a price of $12.21 per share in connection with the settlement of certain litigation. The warrants expired unexercised in thefirst quarter of fiscal 2013and, accordingly, the Company will not be entitled to any income tax deduction related to them. Deferred tax assets at January 29, 2012 included approximately $7.2 million related to these warrants. In accordance with GAAP, such amounts were charged to common stock in the first quarter of fiscal 2013 because common stock in the accompanying consolidated balance sheet includes cumulative credits related to share-based compensation in excess of such amounts.

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Inventory (Tables)

3 Months Ended

May 05, 2013

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	May 5,		February 3,
	2013		2013
	(In thousands)
Raw materials	$	6,174	$	5,678
Work in progress		103		52
Finished goods and purchased merchandise		8,131		6,628
	$	14,408	$	12,358

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Derivative Instruments

3 Months Ended

May 05, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities Disclosure [Text Block]

Note 11 — Derivative Instruments

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are commodity price risk and interest rate risk. The Company does not hold or issue derivative instruments for trading purposes.

The Company is exposed to credit-related losses in the event of non-performance by the counterparties to its derivative instruments. The Company mitigates this risk of nonperformance by dealing with highly rated counterparties.

Additional disclosure about the fair value of derivative instruments is included in Note 10.

Commodity Price Risk

The Company is exposed to the effects of commodity price fluctuations in the cost of ingredients of its products, of which flour, sugar and shortening are the most significant. In order to bring greater stability to the cost of ingredients, from time to time the Company purchases exchange-traded commodity futures contracts, and options on such contracts, for raw materials which are ingredients of its products or which are components of such ingredients, including wheat and soybean oil. The Company is also exposed to the effects of commodity price fluctuations in the cost of gasoline used by its delivery vehicles. To mitigate the risk of fluctuations in the price of its gasoline purchases, the Company may purchase exchange-traded commodity futures contracts and options on such contracts. The difference between the cost, if any, and the fair value of commodity derivatives is reflected in earnings because the Company has not designated any of these instruments as hedges. Gains and losses on these contracts are intended to offset losses and gains on the hedged transactions in an effort to reduce the earnings volatility resulting from fluctuating commodity prices. The settlement of commodity derivative contracts is reported in the consolidated statement of cash flows as a cash flow from operating activities. At May 5, 2013, the Company had commodity derivatives with an aggregate contract volume of 620,000 bushels of wheat. Other than the requirement to meet minimum margin requirements with respect to the commodity derivatives, there are no collateral requirements related to such contracts.

Interest Rate Risk

All of the borrowings under the Company's secured credit facilities bear interest at variable rates based upon either the lenders' prime rate, the Fed funds rate or LIBOR. The interest cost of the Company's debt may be affected by changes in these short-term interest rates and increases in those rates may adversely affect the Company's results of operations.

On March 3, 2011, the Company entered into an interest rate derivative contract having an aggregate notional principal amount of $17.5 million. The derivative contract entitles the Company to receive from the counterparty the excess, if any, of the three-month LIBOR rate over 3.00% for each of the calendar quarters in the period beginning April 2012 and ending December 2015. The Company is accounting for this derivative contract as a cash flow hedge.

Quantitative Summary of Derivative Positions and Their Effect on Results of Operations

The following table presents the fair values of derivative instruments included in the consolidated balance sheet as of May 5, 2013and February 3, 2013:

		Asset Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	2013		2013
		(In thousands)
Agricultural commodity futures contracts	Other current assets	$	175	$	-
		Liability Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	2013		2013
		(In thousands)
Agricultural commodity futures contracts	Accrued liabilities	$	-	$	15
		Asset Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Designated as a Cash Flow Hedge	Balance Sheet Location	2013		2013
		(In thousands)
Interest rate derivative	Other assets	$	7	$	16

The effect of derivative instruments on the consolidated statement of income for the three months ended May 5, 2013 and April 29, 2012, was as follows:

			Amount of Derivative Gain or (Loss)
			Recognized in Income
			Three Months Ended
Derivatives Not Designated as Hedging Instruments		Location of Derivative Gain or (Loss) Recognized in Income		May 5,			April 29,
						2013			2012
			(In thousands)
Agricultural commodity futures
	contracts	Direct operating expenses	$	(170)		$	51
			Amortization of Derivative Asset
			Recognized in Income
			Three Months Ended
Derivatives Designated as a Cash Flow Hedge		Location of Amortization of Derivative Asset Recognized in Income		May 5,			April 29,
						2013			2012
			(In thousands)
Interest rate derivative		Interest expense	$	(19)		$	(2)
			Amount of Derivative Gain or (Loss)
			Recognized in OCI
			Three Months Ended
Derivatives Designated as a Cash Flow Hedge		Location of Derivative Gain or (Loss) Recognized in OCI	May 5,			April 29,
					2013			2012
			(In thousands)
Interest rate derivative		Unrealized gain on interest rate derivative	$	10		$	2
		Less - income tax effect		(4)			(1)
		Net change in amount recognized in OCI	$	6		$	1

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Fair Value Measurement (Assets and Liabilities Measured at Fair Value and carrying value) (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013	Apr. 29, 2012	Jan. 29, 2012
Assets:
Cash and cash equivalents	$ 74,723	$ 66,332	$ 51,524	$ 44,319
Receivables	26,166	25,627
Receivables from equity method franchisees	745	705
Commodity future contracts - Assets	175	0
Interest rate derivatives	7	16
Liabilities:
Accounts payable	13,439	12,198
Comodity future contracts - Liabilities	0	15
Long-term debt (including current maturities)	24,139	25,743
Fair Values By Balance Sheet Grouping [Abstract]
Cash and Cash Equivalents, Fair Value Disclosure	74,723	66,332
Accounts Receivable, Fair Value Disclosure	26,166	25,627
Due From Related Parties Current Fair Value Disclosure	745	705
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	175	0
Interest Rate Cash Flow Hedge Asset at Fair Value	7	16
Accounts Payable, Fair Value Disclosure	13,439	12,198
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	0	15
Long-term Debt, Fair Value	$ 24,139	$ 25,743

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Receivables (Notes Receivables from Franchisees) (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Note receivable from franchisees, net of deferred gain of $1.7 million (Note 12)	$ 2,376	$ 1,738
Less - portion due within one year included in receivables	(510)	(464)
Less - allowance for doubtful accounts	(62)	(62)
Net Notes Receivable	$ 1,804	$ 1,212

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Impairment Charges and Lease Termination Costs (Tables)

3 Months Ended

May 05, 2013

Impairment Charges And Lease Termination Costs Disclosure [Abstract]

Schedule Of Impairment Charges And Lease Termination Costs [TableTextBlock]

		Three Months Ended
		May 5,		April 29,
		2013		2012
		(In thousands)
Impairment of long-lived assets		$	-	$	-
Lease termination costs			8		31
	Total impairment charges and lease termination costs	$	8	$	31

Rollforward Of Lease Termination Costs [TableText Block]

					Three Months Ended
				May 5,		April 29,
				2013		2012
				(In thousands)
Balance at beginning of period				$	646	$	709
	Provision for lease termination costs:
		Adjustments to previously recorded provisions resulting from
			settlements with lessors and adjustments of previous estimates		2		23
		Accretion of discount			6		8
			Total provision		8		31
	Payments on unexpired leases, including settlements with
		lessors			(29)		(46)
Balance at end of period				$	625	$	694

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Shareholders' Equity (Tables)

3 Months Ended

May 05, 2013

Disclosure Of Compensation Related Costs Share Based Payments And Repurchase Of Shares [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

			Three Months Ended
			May 5,		April 29,
			2013		2012
			(In thousands)
Costs charged to earnings related to:
	Stock options		$	217	$	827
	Restricted stock units			729		550
		Total costs	$	946	$	1,377
Costs included in:
	Direct operating expenses		$	496	$	370
	General and administrative expenses			450		1,007
		Total costs	$	946	$	1,377

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Impairment Charges and Lease Termination Costs (accrual for lease termination costs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Lease Termination Costs [RollForward]
Balance	$ 646	$ 709
Adjustments to previously recorded provisions resulting from settlements with lessors and adjustments of previous estimates	2	23
Accretion of discount	6	8
Total provision	8	31
Payments on unexpired leases, including settlements with lessors	(29)	(46)
Balance	$ 625	$ 694

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Income taxes (Narratives) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified			3 Months Ended
	May 05, 2013	Feb. 03, 2013	May 05, 2013 Litigation Warrant [Member]	Jan. 29, 2012 Litigation Warrant [Member]
Income Tax Disclosure [Abstract]
Deferred Tax Assets, Valuation Allowance	$ 9.8	$ 9.8
Class of Warrant or Right [Line Items]
Warrants Issuance Date			fiscal 2008
Warrants issue stock price			$ 12.21
Warrants Expiration Date			first quarter of fiscal 2013
Deferred Tax Assets Tax Deferred Expense Reserves And Accruals Legal Settlements				$ 7.2

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Investments in Franchisees (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 05, 2013	Feb. 03, 2013
Schedule of Equity Method Investments [Line Items]
Number Of Investments In Franchisees	three
Kremeworks Llc [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	25.00%	25.00%
Guarantee Obligations Maximum Exposure Percentage	20.00%
Debt Instrument, Maturity Date	Oct. 01, 2013
Underlying Indebtedness Of Guaranteed Obligations Amount	$ 1.7
Kremeworks Canada LP [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	24.50%	24.50%
Krispy Kreme South Florida Llc [Member]
Schedule of Equity Method Investments [Line Items]
Accrued guarantee liability	$ 1.6	1.6
Equity Method Investment, Ownership Percentage	35.30%	35.30%
Debt Instrument, Maturity Date	Oct. 01, 2009

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Derivative (Narratives) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 05, 2013
Derivative [Line Items]
Derivative, Inception Date	Mar. 03, 2011
Notional Amount of Interest Rate Cash Flow Hedge Derivatives	$ 17.5
Derivative, Description of Variable Rate Basis	three-month LIBOR rate over 3.00%
Derivative Effective Dates	Apr. 01, 2012
Derivative, Maturity Date	Dec. 01, 2015
Derivative, Description of Terms	The derivative contract entitles the Company to receive from the counterparty the excess, if any, of the three-month LIBOR rate over 3.00% for each of the calendar quarters in the period beginning April 2012 and ending December 2015. The Company is accounting for this derivative contract as a cash flow hedge.
Agricultural Commodity Futures Contracts [Member]
Derivative [Line Items]
Derivative Nonmonetary Notional Amount	620,000

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Accounting Policies (Earnings Per Share) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Earnings Per Share Reconciliation [Abstract]
Net income	$ 7,999	$ 6,026
Basic earnings per share - weighted average shares outstanding	67,012	69,562
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Diluted earnings per share - weighted average shares outstanding plus dilutive potential common shares	70,578	71,888
Stock Options [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Incremental Common Shares Attributable to Share-based Payment Arrangements	2,751	1,781
Restricted Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Incremental Common Shares Attributable to Share-based Payment Arrangements	815	545

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Shareholders' Equity (Narrative) (Details) (USD $)	3 Months Ended		12 Months Ended
	May 05, 2013	Apr. 29, 2012	Feb. 03, 2013
Equity Disclosure [Line Items]
Stock Repurchase Program Period Repurchased			March 27, 2012 through June 28, 2012
Stock Repurchase Program Authorized Amount			$ 20,000,000
Stock Repurchased Authorized During Period Shares		255,000
Stock Acquired Average Cost Per Share		$ 7.27	$ 6.42
Cash payments for the repurchase of common shares	0	1,300,000
Common Stock
Equity Disclosure [Line Items]
Shares repurchased under share repurchase authorization		$ 1,900,000	$ 20,000,000

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Investment in Franchisee (Tables)

3 Months Ended

May 05, 2013

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments In Franchisees [Table Text Block]

	May 5, 2013
	Company	Investment
	Ownership	and				Loan
	Percentage	Advances		Receivables		Guarantees
	(Dollars in thousands)
Kremeworks, LLC	25.0%	$	900	$	335	$	332
Kremeworks Canada, LP	24.5%		-		36		-
Krispy Kreme of South Florida, LLC	35.3%		-		374		1,628
			900		745	$	1,960
Less: reserves and allowances			(900)		-
		$	-	$	745
	February 3, 2013
	Company	Investment
	Ownership	and				Loan
	Percentage	Advances		Receivables		Guarantees
	(Dollars in thousands)
Kremeworks, LLC	25.0%	$	900	$	281	$	437
Kremeworks Canada, LP	24.5%		-		20		-
Krispy Kreme of South Florida, LLC	35.3%		-		404		1,628
			900		705	$	2,065
Less: reserves and allowances			(900)		-
		$	-	$	705

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 7,999	$ 6,026
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	2,820	2,482
Deferred income taxes	6,105	4,234
Accrued rent expense	217	114
(Gain) loss on disposal of property and equipment	(147)	229
Share-based compensation	946	1,377
Provision for doubtful accounts	52	48
Amortization of deferred financing costs	124	103
Equity in losses of equity method franchisees	53	50
Other	(173)	(67)
Cash provided by operations	17,996	14,596
Change in assets and liabilities:
Receivables	(495)	(155)
Inventories	(2,132)	482
Other current and non-current assets	3,084	540
Accounts payable and accrued liabilities	(4,290)	(5,131)
Other long-term obligations and deferred credits	230	32
Net cash provided by operating activities	14,393	10,364
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(5,459)	(1,317)
Proceeds from disposals of property and equipment	613	41
Other investing activities	183	(36)
Net cash provided used for investing activities	(4,663)	(1,312)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt	(1,608)	(545)
Deferred financing costs	0	(11)
Proceeds from exercise of stock options	269	0
Proceeds from exercise of warrants	0	9
Repurchase of common shares	0	(1,300)
Net cash used for financing activities	(1,339)	(1,847)
Net increase in cash and cash equivalents	8,391	7,205
Cash and cash equivalents at beginning of period	66,332	44,319
Cash and cash equivalents at end of period	$ 74,723	$ 51,524

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Accounting Policies

3 Months Ended

May 05, 2013

Accounting Policies [Abstract]

Basis Of Presentation And Significant Accounting Policies [Text Block]

Note 1 — Accounting Policies

Krispy Kreme Doughnuts, Inc. (“KKDI”) and its subsidiaries (collectively, the “Company”) are engaged in the sale of doughnuts and complementary products through Company-owned stores. The Company also derives revenue from franchise and development fees and royalties from franchisees. Additionally, the Company sells doughnut mix, other ingredients and supplies and doughnut-making equipment to franchisees.

Significant Accounting Policies

BASIS OF PRESENTATION. The consolidated financial statements contained herein should be read in conjunction with the Company's 2013 Form 10-K. The accompanying interim consolidated financial statements are presented in accordance with the requirements of Article 10 of Regulation S-X and, accordingly, do not include all the disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) with respect to annual financial statements. The interim consolidated financial statements have been prepared in accordance with the Company's accounting practices described in the2013 Form 10-K, but have not been audited. In management's opinion, the financial statements include all adjustments, which consist only of normal recurring adjustments, necessary for a fair statement of the Company's results of operations for the periods presented. The consolidated balance sheet data as of February 3, 2013 were derived from the Company's audited financial statements but do not include all disclosures required by GAAP.

BASIS OF CONSOLIDATION. The financial statements include the accounts of KKDI and its subsidiaries, the most significant of which is KKDI's principal operating subsidiary, Krispy Kreme Doughnut Corporation.

Investments in entities over which the Company has the ability to exercise significant influence but which the Company does not control, and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. These entities typically are 25% to 35% owned and are hereinafter sometimes referred to as “Equity Method Franchisees.”

EARNINGS PER SHARE. The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share reflects the additional common shares that would have been outstanding if dilutive potential common shares had been issued, computed using the treasury stock method. Such potential common shares consist of shares issuable upon the exercise of stock options and warrants and the vesting of currently unvested shares of restricted stock and restricted stock units.

The following table sets forth amounts used in the computation of basic and diluted earnings per share:

			Three Months Ended
			May 5,		April 29,
			2013		2012
			(In thousands)
Numerator: net income			$	7,999	$	6,026
Denominator:
	Basic earnings per share - weighted average shares outstanding			67,012		69,562
	Effect of dilutive securities:
		Stock options and warrants		2,751		1,781
		Restricted stock units		815		545
	Diluted earnings per share - weighted average shares
		outstanding plus dilutive potential common shares		70,578		71,888

Stock options and warrants with respect to 617,000and 2.3million shares for the three months ended May 5, 2013 and April 29, 2012, respectively, have been excluded from the computation of the number of shares used to compute diluted earnings per share because their inclusion would be antidilutive.

COMPREHENSIVE INCOME. Accounting standards on reporting comprehensive income require that certain items, including foreign currency translation adjustments and mark-to-market adjustments on derivative contracts accounted for as cash flow hedges (which are not reflected in net income) be presented as components of comprehensive income. The cumulative amounts recognized by the Company under these standards are reflected in the consolidated balance sheet as accumulated other comprehensive income, a component of shareholders' equity.

		May 5,		April 29,
		2013		2012
		(In thousands)
Accumulated other comprehensive loss:
	Unrealized losses on cash flow hedge	$	(542)	$	(547)
	Less: deferred income taxes		210		212
	Balance at the end of the period, net of tax	$	(332)	$	(335)

CORRECTION OF BALANCE SHEET CLASSIFICATION ERROR.The Company's KK Supply Chain transfers doughnut mixes and certain other goods to third-party distribution companies which, in turn, distribute such products to Company and franchise stores pursuant to distribution contracts with KK Supply Chain. The Company does not record revenues or profit on the product transfers to the distribution companies because all revenue recognition criteria are not met at that time. Revenues and profit are recorded only upon the delivery of the goods to the stores by the distribution companies (and the sales to Company shops are eliminated in consolidation). In the fourth quarter of fiscal 2013, the Company concluded that certain of the Company's receivables from third-party distribution companies resulting from the product transfers had been incorrectly reported as a component of inventories, rather than as a component of receivables, in prior periods. The Company corrected this classification error as of February 3, 2013. While not material to previously issued financial statements, to enhance comparability, the Company corrected the corresponding error as of April 29 and January 29, 2012, by revising the classification of $3.8 million and $3.9 million, respectively, of receivables from the distribution companies previously classified as inventories to receivables. The error also affected the change in inventories and change in receivables line items in the statement of cash flows in the first quarter of fiscal 2013, but there was no effect on net cash provided by operating activities.  The Company revised its statement of cash flows to adjust the increase in receivables from $261,000 to $155,000 and to adjust the decrease in inventories from $588,000 to $482,000 in first quarter of fiscal 2013. Correction of this error had no effect on the Company's results of operations, total current assets, working capital, or total operating, investing, or financing cash flows.  

Recent Accounting Pronouncements

In February 2013, the FASB issued guidance requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no material effect on the Company's consolidated financial statements.

In July 2012, the FASB issued amended accounting guidance regarding indefinite-lived intangible asset impairment testing. The amended guidance permits, but does not require, an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not, the indefinite-lived intangible asset is impaired. This guidance is effective for the Company in fiscal 2014, with early adoption permitted. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no effect on the Company's consolidated financial statements.

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Receivables

3 Months Ended

May 05, 2013

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 4 — Receivables

The components of receivables are as follows:

			May 5,		February 3,
			2013		2013
			(In thousands)
Receivables:
	Wholesale customers		$	10,459	$	11,244
	Unaffiliated franchisees			10,877		9,728
	Due from third-party distributors			3,820		3,590
	Other receivables			1,206		1,216
	Current portion of notes receivable			510		464
				26,872		26,242
	Less — allowance for doubtful accounts:
		Wholesale customers		(274)		(373)
		Unaffiliated franchisees		(432)		(242)
				(706)		(615)
			$	26,166	$	25,627
Receivables from Equity Method Franchisees (Note 6):
	Trade		$	745	$	705

The changes in the allowance for doubtful accounts are summarized as follows:

		Three Months Ended
		May 5,		April 29,
		2013		2012
		(In thousands)
Allowance for doubtful accounts related to receivables:
	Balance at beginning of period	$	615	$	1,158
	Provision for doubtful accounts		69		107
	Net recoveries (chargeoffs)		22		(735)
	Balance at end of period	$	706	$	530
Allowance for doubtful accounts related to receivables from Equity Method Franchisees:
	Balance at beginning of period	$	-	$	-
	Provision for doubtful accounts		(17)		(59)
	Net recoveries (chargeoffs)		17		59
	Balance at end of period	$	-	$	-

The Company also has notes receivable from franchiseesincluded in “Other assets” in the accompanying consolidated balance sheet which are summarized in the following table.

		May 5,		February 3,
		2013		2013
		(In thousands)
Notes receivable:
	Notes receivable from franchisees, net of deferred gain of $1.7 million (Note 12)	$	2,376	$	1,738
	Less — portion due within one year included in receivables		(510)		(464)
	Less — allowance for doubtful accounts		(62)		(62)
		$	1,804	$	1,212

The changes in the allowance for doubtful accounts related to notes receivable are summarized as follows:

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Balance at beginning of period	$	62	$	68
Provision for doubtful accounts		-		-
Net recoveries (chargeoffs)		-		-
Balance at end of period	$	62	$	68

In addition to the foregoing notes receivable, the Company had promissory notes totaling approximately $3.2million at May 5, 2013 and $3.3 million at February 3, 2013 representing primarily royalties and fees due to the Company which, as a result of doubt about their collection, the Company had not yet recorded as revenues. Payments were required to be made on a promissory note of approximately $220,000 of the $3.2 million balance at May 5, 2013.

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Segment Information

3 Months Ended

May 05, 2013

Segment Reporting Disclosure [Abstract]

Segment Reporting Disclosure [Text Block]

Note 2 — Segment Information

The Company's reportable segments are Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment is comprised of the stores operated by the Company. These stores sell doughnuts and complementary products through both on-premises and wholesale sales channels, although some stores serve only one of these distribution channels. The Domestic Franchise and International Franchise segments consist of the Company's franchise operations. Under the terms of franchise agreements, domestic and international franchisees pay royalties and fees to the Company in return for the use of the Krispy Kreme name and ongoing brand and operational support. Expenses for these segments include costs to recruit new franchisees, to assist in store openings, to support franchisee operations and marketing efforts, as well as allocated corporate costs. The majority of the ingredients and materials used by Company stores are purchased from the KK Supply Chain segment, which supplies doughnut mix, other ingredients and supplies and doughnut making equipment to both Company and franchisee-owned stores.

All intercompany sales by the KK Supply Chain segment to the Company Stores segment are at prices intended to reflect an arms-length transfer price and are eliminated in consolidation. Operating income for the Company Stores segment does not include any profit earned by the KK Supply Chain segment on sales of doughnut mix and other items to the Company Stores segment; such profit is included in KK Supply Chain operating income.

The following table presents the results of operations of the Company's operating segments for the three months ended May 5, 2013 and April 29, 2012. Segment operating income is consolidated operating income before unallocated general and administrative expenses and impairment charges and lease termination costs.

					Three Months Ended
					May 5,		April 29,
					2013		2012
					(In thousands)
Revenues:
	Company Stores				$	81,921	$	73,341
	Domestic Franchise					2,871		2,633
	International Franchise					6,445		6,027
	KK Supply Chain:
		Total revenues				59,811		53,785
		Less – intersegment sales elimination				(30,423)		(27,290)
			External KK Supply Chain revenues			29,388		26,495
				Total revenues	$	120,625	$	108,496
Operating income:
	Company Stores				$	5,314	$	2,948
	Domestic Franchise					1,439		1,569
	International Franchise					4,531		4,494
	KK Supply Chain					10,239		8,477
		Total segment operating income				21,523		17,488
	Unallocated general and administrative expenses (including depreciation
		and amortization)				(6,331)		(6,623)
	Impairment charges and lease termination costs					(8)		(31)
		Consolidated operating income			$	15,184	$	10,834
Depreciation and amortization expense:
	Company Stores				$	2,354	$	2,097
	Domestic Franchise					14		55
	International Franchise					3		3
	KK Supply Chain					173		162
	Corporate administration					276		165
		Total depreciation and amortization expense			$	2,820	$	2,482

Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources among segments.

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Investment in Franchisees (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
Schedule of Equity Method Investments [Line Items]
Investments in equity method franchisees	$ 0	$ 0
Receivables from equity method franchisees	745	705
Guarantor Obligations, Maximum Exposure, Undiscounted	1,960	2,065
Kremeworks Llc [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	25.00%	25.00%
Investments in equity method franchisees	900	900
Receivables from equity method franchisees	335	281
Guarantor Obligations, Maximum Exposure, Undiscounted	332	437
Kremeworks Canada LP [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	24.50%	24.50%
Investments in equity method franchisees	0	0
Receivables from equity method franchisees	36	20
Guarantor Obligations, Maximum Exposure, Undiscounted	0	0
Krispy Kreme South Florida Llc [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	35.30%	35.30%
Investments in equity method franchisees	0	0
Receivables from equity method franchisees	374	404
Guarantor Obligations, Maximum Exposure, Undiscounted	1,628	1,628
Gross Amount Before Reserve [Member]
Schedule of Equity Method Investments [Line Items]
Investments in equity method franchisees	900	900
Receivables from equity method franchisees	745	705
Reserves And Allowances [Member]
Schedule of Equity Method Investments [Line Items]
Investments in equity method franchisees	(900)	(900)
Receivables from equity method franchisees	$ 0	$ 0

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Fair Value Measurement (Tables)

3 Months Ended

May 05, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

		May 5, 2013
		Level 1		Level 2		Level 3
		(In thousands)
Assets:
	401(k) mirror plan assets	$	2,147	$	-	$	-
	Agricultural commodity futures contracts		175		-		-
	Interest rate derivative		-		7		-
	Total assets	$	2,322	$	7	$	-
		February 3, 2013
		Level 1		Level 2		Level 3
		(In thousands)
Assets:
	401(k) mirror plan assets	$	1,816	$	-	$	-
	Interest rate derivative		-		16		-
	Total assets	$	1,816	$	16	$	-
Liabilities:
	Agricultural commodity futures contracts	$	15	$	-	$	-

Fair Value, by Balance Sheet Grouping [Table Text Block]

		May 5, 2013				February 3, 2013
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
		(In thousands)
Assets:
	Cash and cash equivalents	$	74,723	$	74,723	$	66,332	$	66,332
	Receivables		26,166		26,166		25,627		25,627
	Receivables from Equity Method Franchisees		745		745		705		705
	Agricultural commodity futures contracts		175		175		-		-
	Interest rate derivatives		7		7		16		16
Liabilities:
	Accounts payable		13,439		13,439		12,198		12,198
	Agricultural commodity futures contracts		-		-		15		15
	Long-term debt (including current maturities)		24,139		24,139		25,743		25,743

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Accounting Policies (Accumulated Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013	Apr. 29, 2012	Jan. 29, 2012
Accumulated Other Comprehensive Income [Line Items]
Total shareholders equity	$ 255,652	$ 246,432	$ 247,511	$ 249,126
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income [Line Items]
Unrealized losses on cash flow hedge	(542)		(547)
Less: deferred income taxes	210		212
Total shareholders equity	$ (332)	$ (338)	$ (335)	$ (336)

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Receivables (Doubtful accounts summary) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Allowance For Doubtful Accounts Receivable [Rollforward]
Balance	$ 615
Provision for doubtful accounts	52	48
Balance	706
Trade Accounts Receivable [Member]
Allowance For Doubtful Accounts Receivable [Rollforward]
Balance	615	1,158
Provision for doubtful accounts	69	107
Net recoveries (chargeoffs)	22	(735)
Balance	706	530
Equity Method Franchisees Receivables [Member]
Allowance For Doubtful Accounts Receivable [Rollforward]
Balance	0	0
Provision for doubtful accounts	(17)	(59)
Net recoveries (chargeoffs)	17	59
Balance	0	0
Notes Receivable [Member]
Allowance For Doubtful Accounts Receivable [Rollforward]
Balance	62	68
Provision for doubtful accounts	0	0
Net recoveries (chargeoffs)	0	0
Balance	$ 62	$ 68

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Derivative (Effect of Derivative Instruments by Balance Sheet locations) (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	$ 175	$ 0
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	0	15
Interest Rate Cash Flow Hedge Asset at Fair Value	7	16
Other Current Assets [Member] | Agricultural Commodity Futures Contracts [Member]
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	175	0
Accrued Liabilities [Member] | Agricultural Commodity Futures Contracts [Member]
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	0	15
Other Assets [Member]
Derivative [Line Items]
Interest Rate Cash Flow Hedge Asset at Fair Value	$ 7	$ 16

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Impairment Charges and Lease Termination Costs (components of impairment charges and lease termination costs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Impairment Charges And Lease Termination Costs Disclosure [Abstract]
Impairment of long-lived assets	$ 0	$ 0
Lease termination costs	8	31
Total impairment charges and lease termination costs	$ 8	$ 31

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Statement of Income and Comprehensive Income [Abstract]
Net income	$ 7,999	$ 6,026
Other comprehensive income:
Unrealized gain on cash flow hedge	10	2
Less income taxes	(4)	(1)
Total other comprehensive income	6	1
Comprehensive income	$ 8,005	$ 6,027

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Commitments and contingencies

3 Months Ended

May 05, 2013

Commitments And Contingencies [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 7 — Commitments and Contingencies

Except as disclosed below, the Company currently is not a party to any material legal proceedings.

Pending Litigation

K2 Asia Litigation

On April 7, 2009, a Cayman Islands corporation, K2 Asia Ventures, and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, its franchisee in the Philippines, and other persons associated with the franchisee. The suit alleges that the Company and the other defendants conspired to deprive the plaintiffs of claimed “exclusive rights” to negotiate franchise and development agreements with prospective franchisees in the Philippines, and seeks unspecified damages.The Company believes that these allegations are false and intends to vigorously defend against the lawsuit.

Colchester Security Litigation

On January 27, 2012, Colchester Security II, LLC, the Company's former landlord in Lorton, Virginia, filed a suit against the Company in the Circuit Court of Fairfax County, Virginia alleging breach of the lease and negligence resulting in property damage at a commissary facility previously operated by the Company.  The plaintiff seeks $2.7 million in damages.  The Company denies the allegations and intends to pursue counterclaims of approximately $3.0million relating to indemnity claims and breach of the lease. No liability has been recorded with respect to this matter because management does not believe it is probable that a loss has been incurred.In March 2013, both parties agreed to avail themselves of the Fairfax County Court's alternate dispute resolution program, and the matter has been set for binding arbitration to commence on June 20, 2013.

Other Commitments and Contingencies

One of the Company's lenders had issued letters of credit on behalf of the Company totaling $9.2million at May 5, 2013, all of which secure the Company's reimbursement obligations to insurers under the Company's self-insurance arrangements.

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CONSOLIDATED BALANCE SHEET (Parentheticals) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued and outstanding	0	0
Common stock, shares authorized	300,000	300,000
Common Shares Outstanding [Member]
Common stock, shares issued and outstanding	65,487	65,356

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CONSOLIDATED STATEMENT OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
CONSOLIDATED STATEMENT OF INCOME
Revenues	$ 120,625	$ 108,496
Operating expenses:
Direct operating expenses (exclusive of depreciation and amortization expense shown below)	96,558	88,691
General and administrative expenses	6,055	6,458
Depreciation and amortization expense	2,820	2,482
Impairment charges and lease termination costs	8	31
Operating income	15,184	10,834
Interest income	61	27
Interest Expense	(437)	(398)
Equity in losses of equity method franchisees	(53)	(50)
Other non-operating income and (expense), net	(5)	78
Income before income taxes	14,750	10,491
Provision for income taxes	6,751	4,465
Net income	$ 7,999	$ 6,026
Earnings per common share:
Basic	$ 0.12	$ 0.09
Diluted	$ 0.11	$ 0.08

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Derivative Instruments(Effect of Derivative Instuments by Income Statement Location) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net [Abstract]
Unrealized gain on cash flow hedge	$ 10	$ 2
Other Comprehensive Income Unrealized Gain Loss On Derivatives Arising During Period Tax	4	1
Gain Loss In Fair Value Of Derivative Net [Member]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net [Abstract]
Unrealized loss on cash flow hedge, net of income taxes	6	1
Direct Operating Expense [Member] | Agricultural Commodity Futures Contracts [Member]
Derivative Instruments, Gain (Loss) Recognized in Income, Net [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	(170)	51
Interest Expense [Member]
Derivative Instruments, Gain (Loss) Recognized in Income, Net [Abstract]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ (19)	$ (2)

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Derivative Instruments (Tables)

3 Months Ended

May 05, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

		Asset Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	2013		2013
		(In thousands)
Agricultural commodity futures contracts	Other current assets	$	175	$	-
		Liability Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	2013		2013
		(In thousands)
Agricultural commodity futures contracts	Accrued liabilities	$	-	$	15

		Asset Derivatives
		Fair Value
		May 5,		February 3,
Derivatives Designated as a Cash Flow Hedge	Balance Sheet Location	2013		2013
		(In thousands)
Interest rate derivative	Other assets	$	7	$	16

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

			Amount of Derivative Gain or (Loss)
			Recognized in Income
			Three Months Ended
Derivatives Not Designated as Hedging Instruments		Location of Derivative Gain or (Loss) Recognized in Income		May 5,		April 29,
					2013		2012
			(In thousands)
Agricultural commodity futures
	contracts	Direct operating expenses	$	(170)	$	51
			Amortization of Derivative Asset
			Recognized in Income
			Three Months Ended
Derivatives Designated as a Cash Flow Hedge		Location of Amortization of Derivative Asset Recognized in Income		May 5,		April 29,
					2013		2012
			(In thousands)
Interest rate derivative		Interest expense	$	(19)	$	(2)

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

		Amount of Derivative Gain or (Loss)
		Recognized in OCI
		Three Months Ended
Derivatives Designated as a Cash Flow Hedge	Location of Derivative Gain or (Loss) Recognized in OCI	May 5,			April 29,
				2013			2012
		(In thousands)
Interest rate derivative	Unrealized gain on interest rate derivative	$	10		$	2
	Less - income tax effect		(4)			(1)
	Net change in amount recognized in OCI	$	6		$	1

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Receivables (Tables)

3 Months Ended

May 05, 2013

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

			May 5,		February 3,
			2013		2013
			(In thousands)
Receivables:
	Wholesale customers		$	10,459	$	11,244
	Unaffiliated franchisees			10,877		9,728
	Due from third-party distributors			3,820		3,590
	Other receivables			1,206		1,216
	Current portion of notes receivable			510		464
				26,872		26,242
	Less — allowance for doubtful accounts:
		Wholesale customers		(274)		(373)
		Unaffiliated franchisees		(432)		(242)
				(706)		(615)
			$	26,166	$	25,627
Receivables from Equity Method Franchisees (Note 6):
	Trade		$	745	$	705

		May 5,		February 3,
		2013		2013
		(In thousands)
Notes receivable:
	Notes receivable from franchisees, net of deferred gain of $1.7 million (Note 12)	$	2,376	$	1,738
	Less — portion due within one year included in receivables		(510)		(464)
	Less — allowance for doubtful accounts		(62)		(62)
		$	1,804	$	1,212

Allowance for Credit Losses on Financing Receivables [Table Text Block]

		Three Months Ended
		May 5,		April 29,
		2013		2012
		(In thousands)
Allowance for doubtful accounts related to receivables:
	Balance at beginning of period	$	615	$	1,158
	Provision for doubtful accounts		69		107
	Net recoveries (chargeoffs)		22		(735)
	Balance at end of period	$	706	$	530
Allowance for doubtful accounts related to receivables from Equity Method Franchisees:
	Balance at beginning of period	$	-	$	-
	Provision for doubtful accounts		(17)		(59)
	Net recoveries (chargeoffs)		17		59
	Balance at end of period	$	-	$	-

	Three Months Ended
	May 5,		April 29,
	2013		2012
	(In thousands)
Balance at beginning of period	$	62	$	68
Provision for doubtful accounts		-		-
Net recoveries (chargeoffs)		-		-
Balance at end of period	$	62	$	68

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Shareholders' Equity (Share-based compensation) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Share Based Compensation Arrangement By Share Based Payment Award And Income Statement Location [Line Items]
Share-based compensation	$ 946	$ 1,377
Stock Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award And Income Statement Location [Line Items]
Share-based compensation	217	827
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award And Income Statement Location [Line Items]
Share-based compensation	729	550
Direct Operating Expense [Member]
Share Based Compensation Arrangement By Share Based Payment Award And Income Statement Location [Line Items]
Share-based compensation	496	370
General and Administrative Expense [Member]
Share Based Compensation Arrangement By Share Based Payment Award And Income Statement Location [Line Items]
Share-based compensation	$ 450	$ 1,007

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
Inventory Disclosure [Abstract]
Raw materials	$ 6,174	$ 5,678
Work in progress	103	52
Finished goods and purchased merchandise	8,131	6,628
Inventories, Net, Total	$ 14,408	$ 12,358

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Receivables (Narratives) (Details) (USD $)	May 05, 2013	Feb. 03, 2013
Receivables [Abstract]
Notes Receivable Unrecognized Franchise Revenue	$ 3,200,000	$ 3,300,000
Notes Receivable Unrecognized Franchise Revenue Required To Be Paid	$ 220,000

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Receivables (Receivables by categories) (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other receivables	$ 1,206	$ 1,216
Current portion of notes receivable	510	464
Accounts Notes And Loans Receivable Gross Current	26,872	26,242
Allowance for Doubtful Accounts Receivable, Current	(706)	(615)
Receivables, Net, Current, Total	26,166	25,627
Receivables from equity method franchisees	745	705
Wholesale Customers [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	10,459	11,244
Allowance for Doubtful Accounts Receivable, Current	(274)	(373)
Unaffiliated Franchisees [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	10,877	9,728
Allowance for Doubtful Accounts Receivable, Current	(432)	(242)
Third party distributors [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	$ 3,820	$ 3,590

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Investment in Franchisees

3 Months Ended

May 05, 2013

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments Disclosure [Text Block]

Note 6 — Investments in Franchisees

As of May 5, 2013, the Company had investments in three franchisees. These investments have been made in the form of capital contributions and, in certain instances, loans evidenced by promissory notes. These investments are reflected as “Investments in equity method franchisees” in the consolidated balance sheet.

The Company's financial exposures related to franchisees in which the Company has an investment are summarized in the tables below.

	May 5, 2013
	Company	Investment
	Ownership	and				Loan
	Percentage	Advances		Receivables		Guarantees
	(Dollars in thousands)
Kremeworks, LLC	25.0%	$	900	$	335	$	332
Kremeworks Canada, LP	24.5%		-		36		-
Krispy Kreme of South Florida, LLC	35.3%		-		374		1,628
			900		745	$	1,960
Less: reserves and allowances			(900)		-
		$	-	$	745
	February 3, 2013
	Company	Investment
	Ownership	and				Loan
	Percentage	Advances		Receivables		Guarantees
	(Dollars in thousands)
Kremeworks, LLC	25.0%	$	900	$	281	$	437
Kremeworks Canada, LP	24.5%		-		20		-
Krispy Kreme of South Florida, LLC	35.3%		-		404		1,628
			900		705	$	2,065
Less: reserves and allowances			(900)		-
		$	-	$	705

The Company has guaranteed loans from third-party lenders on behalf of certain Equity Method Franchisees, primarily to assist the franchisees in obtaining financing. The loans are collateralized by certain assets of the franchisee, generally the Krispy Kreme store and related equipment. The loan guarantee amounts represent the portion of the principal amount outstanding under the related loan that is subject to the Company's guarantee.

The Company has a 25% interest in Kremeworks, LLC (“Kremeworks”), and has guaranteed 20% of the outstanding principal balance of certain of Kremeworks' bank indebtedness, which, as amended, matures in October 2013. The aggregate amount of such indebtedness was approximately $1.7 million atMay 5, 2013.

Current liabilities include accruals for potential payments under loan guarantees of approximately $1.6million at bothMay 5, 2013 and February 3, 2013related to Krispy Kreme of South Florida, LLC (“KKSF”). The underlying indebtedness matured by its terms in October 2009. Such maturity had been extended on a month-to-month basis pursuant to an informal agreement between KKSF and the lender. In October 2012, KKSF received notice that the original lender had sold the loan to a new lender. The new lender has advised KKSF that the entire balance due under the loan is currently due and owing, but has not made demand for payment on KKSF. KKSF is seeking modifications of the loan agreement from the new lender to extend the maturity of the loan and, as an alternative, is seeking replacement financing from other lenders to refinance the balance of the loan. There was no liability reflected in the financial statements for the guarantee of Kremeworks' debt because the Company did not believe it was probable that the Company would be required to perform under that guarantee. While there is no current demand on the Company to perform under either of the guarantees, there can be no assurance that the Company will not be required to perform and, if circumstances change from those prevailing at May 5, 2013, additional guarantee payments or provisions for guarantee payments could be required with respect to either of the guarantees, and such payments or provisions could be significant.

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Accounting Policies (Narratives) (Details) (USD $)	3 Months Ended		12 Months Ended
	May 05, 2013	Apr. 29, 2012	Jan. 29, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Prior Period Reclassification Adjustment		$ 3,800,000	$ 3,900,000
Increase Decrease In Accounts Receivable Before Reclassification		(261,000)
Receivables	(495,000)	(155,000)
Increase Decrease In Inventories Before Reclassification		588,000
Inventories	$ (2,132,000)	$ 482,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	617,000	2,300,000
Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	35.00%
Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	25.00%

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Commitments and Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 05, 2013
Loss Contingencies [Line Items]
Letters Of Credit Outstanding Amount	9.2
K2 Asia Litigation [Member]
Loss Contingencies [Line Items]
Loss Contingency Lawsuit Filing Date	April 7, 2009
Loss Contingency Name Of Plaintiff	K2 Asia Ventures
LossContingencyActionsTakenByPlaintiff	On April 7, 2009, a Cayman Islands corporation, K2 Asia Ventures, and its owners filed a lawsuit in Forsyth County, North Carolina Superior Court against the Company, its franchisee in the Philippines, and other persons associated with the franchisee. The suit alleges that the Company and the other defendants conspired to deprive the plaintiffs of claimed “exclusive rights” to negotiate franchise and development agreements with prospective franchisees in the Philippines, and seeks unspecified damages.
Colchester Security Litigation [Member]
Loss Contingencies [Line Items]
Loss Contingency Lawsuit Filing Date	January 27, 2012
Loss Contingency Name Of Plaintiff	Colchester Security II, LLC
LossContingencyActionsTakenByPlaintiff	On January 27, 2012, Colchester Security II, LLC, the Company's former landlord in Lorton, Virginia, filed a suit against the Company in the Circuit Court of Fairfax County, Virginia alleging breach of the lease and negligence resulting in property damage at a commissary facility previously operated by the Company.  The plaintiff seeks $2.7 million in damages.  The Company denies the allegations and intends to pursue counterclaims of approximately $3.0 million relating to indemnity claims and breach of the lease. No liability has been recorded with respect to this matter because management does not believe it is probable that a loss has been incurred.
Loss Contingency, Damages Sought, Value	2.7
Gain Contingency, Unrecorded Amount	3.0
Loss Contingency Trial Or Alternative Dispute Resolution	In March 2013, both parties agreed to avail themselves of the Fairfax County Court’s alternate dispute resolution program, and the matter has been set for binding arbitration to commence on June 20, 2013.
Loss Contingency, Expected Trial Commencement	2013-06

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Impairment Charges and Lease Termination Costs

3 Months Ended

May 05, 2013

Impairment Charges And Lease Termination Costs Disclosure [Abstract]

Impairment Charges And Lease Termination Costs Disclosure [Text Block]

Note 9 — Impairment Charges and Lease Termination Costs

The components of impairment charges and lease termination costs are as follows:

		Three Months Ended
		May 5,		April 29,
		2013		2012
		(In thousands)
Impairment of long-lived assets		$	-	$	-
Lease termination costs			8		31
	Total impairment charges and lease termination costs	$	8	$	31

The Company tests long-lived assets for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. These events and changes in circumstances include store closing and refranchising decisions, the effects of changing costs on current results of operations, observed trends in operating results, and evidence of changed circumstances observed as a part of periodic reforecasts of future operating results and as part of the Company's annual budgeting process. When the Company concludes that the carrying value of long-lived assets is not recoverable (based on future projected undiscounted cash flows), the Company records impairment charges to reduce the carrying value of those assets to their estimated fair values.

Lease termination costs represent the estimated fair value of liabilities related to unexpired leases, after reduction by the amount of accrued rent expense, if any, related to the leases, and are recorded when the lease contracts are terminated or, if earlier, the date on which the Company ceases use of the leased property. The fair value of these liabilities are estimated as the excess, if any, of the contractual payments required under the unexpired leases over the current market lease rates for the properties, discounted at a credit-adjusted risk-free rate over the remaining term of the leases. The provision for lease termination costs also includes adjustments to liabilities recorded in prior periods arising from changes in estimated sublease rentals and from settlements with landlords.

The transactions reflected in the accrual for lease termination costs are summarized as follows:

					Three Months Ended
				May 5,		April 29,
				2013		2012
				(In thousands)
Balance at beginning of period				$	646	$	709
	Provision for lease termination costs:
		Adjustments to previously recorded provisions resulting from
			settlements with lessors and adjustments of previous estimates		2		23
		Accretion of discount			6		8
			Total provision		8		31
	Payments on unexpired leases, including settlements with
		lessors			(29)		(46)
Balance at end of period				$	625	$	694

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Inventories

3 Months Ended

May 05, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 5 — Inventories

The components of inventories are as follows:

	May 5,		February 3,
	2013		2013
	(In thousands)
Raw materials	$	6,174	$	5,678
Work in progress		103		52
Finished goods and purchased merchandise		8,131		6,628
	$	14,408	$	12,358

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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) In Thousands	Total USD ($)	Common Shares Outstanding [Member]	Common Stock USD ($)	Accumulated Other Comprehensive Income (Loss) USD ($)	Accumulated Deficit USD ($)
Beginning Balance at Jan. 29, 2012	$ 249,126		$ 377,539	$ (336)	$ (128,077)
Beginning Balance at Jan. 29, 2012		68,092
Total comprehensive income	6,027			1	6,026
Write Off of deferred tax asset related to expiration of unexercised stock warrants	(7,174)		(7,174)
Exercise of stock options	0
Exercise of warrants	9		9
Exercise of warrants		1
Share-based compensation	1,377		1,377
Share-based compensation		11
Repurchase of common shares	(1,854)		(1,854)
Repurchase of common shares		(255)
Ending Balance at Apr. 29, 2012	247,511		369,897	(335)	(122,051)
Ending Balance at Apr. 29, 2012		67,849
Beginning Balance at Feb. 03, 2013	246,432		354,068	(338)	(107,298)
Beginning Balance at Feb. 03, 2013		65,356
Total comprehensive income	8,005			6	7,999
Exercise of stock options	269		269
Exercise of stock options		122
Exercise of warrants	0
Share-based compensation	946		946
Share-based compensation		9
Ending Balance at May. 05, 2013	$ 255,652		$ 355,283	$ (332)	$ (99,299)
Ending Balance at May. 05, 2013		65,487

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Acquisitions and Divestitures (Narratives) (Details) (USD $)	3 Months Ended
	May 05, 2013
August 2012 Business Acquisition [Member]
Schedule Of Acquisitions And Divestitures [Line Items]
Business Acquisition Effective Date Of Acquisition1	Aug. 30, 2012
Payments to Acquire Businesses, Net of Cash Acquired	$ 915,000
Number Of Stores Acquired	two
Business Acquisition, Purchase Price Allocation, Property, Plant and Equipment	464,000
Business Acquisition Purchase Price Allocation Other Assets	8,000
Business Acquisition Purchase Price Allocation Intangible assets	443,000
February 2013 Divestiture [Member]
Schedule Of Acquisitions And Divestitures [Line Items]
Asset Sale Effective Date Of Sale	Feb. 22, 2013
Number Of Stores Sold	three
Total Purchase Price From Sale Of Assets	1,100,000
Notes Receivable Due Gross	1,100,000
Percent Of Sales Used To Calculate Note Receivable Principal Payment	3.50%
Notes Receivable Interest Rate	7.00%
Note Receivable Initial Payment Due Date	Feb. 01, 2013
Stores Divestiture Revenue	9,000,000
August 2006 Asset Acquisition [Member]
Schedule Of Acquisitions And Divestitures [Line Items]
Asset Sale Effective Date Of Sale	Aug. 01, 2006
Payments To Acquire Store Assets	2,900,000
September 2012 Divestiture [Member]
Schedule Of Acquisitions And Divestitures [Line Items]
Asset Sale Effective Date Of Sale	Sep. 27, 2012
Number Of Stores Sold	three
Total Purchase Price From Sale Of Assets	3,600,000
Proceeds from Sales of Business, Affiliate and Productive Assets	360,000
Notes Receivable Due Gross	3,200,000
Notes Receivable Periodic Payment	51,000
Notes Receivable Interest Rate	8.00%
Note Receivable Initial Payment Due Date	Nov. 01, 2012
Note Receivable Due Date	Oct. 01, 2017
Assets Sold Carrying Amounts	1,900,000
Deferred Gain on Sale of Property	$ 1,700,000
Percent Investment Must Exceed To Consider Gain Recognition	20.00%

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Fair Value Measurement (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	May 05, 2013	Feb. 03, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate derivative	$ 7	$ 16
Commodity future contracts - Assets	175	0
Commodity future contracts - Liabilities	0	15
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
401(k) mirror plan assets	2,147	1,816
Interest rate derivative	0	0
Total Assets	2,322	1,816
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Agricultural Commodity Futures Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity future contracts - Assets	175
Commodity future contracts - Liabilities		15
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
401(k) mirror plan assets	0	0
Interest rate derivative	7	16
Total Assets	7	16
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Agricultural Commodity Futures Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity future contracts - Assets	0
Commodity future contracts - Liabilities		0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
401(k) mirror plan assets	0	0
Interest rate derivative	0	0
Total Assets	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Agricultural Commodity Futures Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity future contracts - Assets	0
Commodity future contracts - Liabilities		$ 0

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Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 05, 2013	Apr. 29, 2012
Segment Reporting Information [Line Items]
Revenues	$ 120,625	$ 108,496
Segment Reporting Information, Revenue for Reportable Segment	59,811	53,785
Segment Reporting Information, Intersegment Revenue	(30,423)	(27,290)
Segment Operating Income Loss	21,523	17,488
Unallocated general and administrative expenses (including depreciaton and amortization)	(6,331)	(6,623)
Impairment charges and lease termination costs	(8)	(31)
Operating income	15,184	10,834
Depreciation and amortization expense	2,820	2,482
Company Stores [Member]
Segment Reporting Information [Line Items]
Revenues	81,921	73,341
Segment Operating Income Loss	5,314	2,948
Depreciation and amortization expense	2,354	2,097
Domestic Franchise [Member]
Segment Reporting Information [Line Items]
Revenues	2,871	2,633
Segment Operating Income Loss	1,439	1,569
Depreciation and amortization expense	14	55
International Franchise [Member]
Segment Reporting Information [Line Items]
Revenues	6,445	6,027
Segment Operating Income Loss	4,531	4,494
Depreciation and amortization expense	3	3
KK Supply Chain [Member]
Segment Reporting Information [Line Items]
Revenues	29,388	26,495
Segment Operating Income Loss	10,239	8,477
Depreciation and amortization expense	173	162
Corporate Administration [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization expense	$ 276	$ 165

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Acquisitions and Divestitures

3 Months Ended

May 05, 2013

Acquisitions and Divestitures [Abstract]

Acquisitions And Divestitures Disclosures [Text Block]

Business Combination

On August 30, 2012, the Company acquired the assets and operations of one of its franchisees in exchange for $915,000 cash. The acquired assets consisted principally of two Krispy Kreme stores. The allocation of the purchase price was as follows: $464,000 to property and equipment, $8,000 to other assets, and the balance of $443,000 to reacquired franchise rights. The results of operations of the acquired business have been included with those of the Company from the acquisition date.

Asset Divestiture

On February 22, 2013, the Company refranchised three stores in the Kansas/Missouri market to a new franchisee who was a former employee of the Company; the Company closed a fourth store in the market in January 2013 in anticipation of the transaction. The aggregate purchase price of the stores and the related assets was approximately $1.1 million evidenced by a promissory notepayable in installments equal to 3.5% of the stores' sales, plus interest at 7% beginning in February 2013. The four stores had total sales of approximately $9 million in fiscal 2013. The Company did not record a significant gain or loss on the refranchising transaction.

On September 27, 2012, the Company sold to one of its franchisees the leasehold interests and certain other assets, including rights under franchise agreements, for three Krispy Kreme stores operated by the franchisee. The Company acquired the leasehold interests and other assets related to the three stores from the franchisee in August 2006 for $2.9 million cash. After the Company's acquisition of the assets, the franchisee has continued to operate the stores for its own account pursuant to an operating agreement between the Company and the franchisee. The aggregate purchase price of the three stores and the related assets in the September 2012 transaction was approximately $3.6 million, of which approximately $360,000 was paid in cash at closing. The balance of the purchase price was evidenced by a promissory note in the approximate amount of $3.2 million, payable in monthly installments of approximately $51,000, including interest at 8%, beginning in November 2012, and a final installment of the remaining principal balance on October 1, 2017. The carrying value of the divested assets was approximately $1.9 million. Because the initial investment made by the franchisee to acquire the assets was less than the minimum amount necessary to recognize a gain on the sale, the Company deferred recognition of the $1.7 million gain, and such deferred gain is reflected as a reduction in the carrying value of the note receivable. The Company is reporting the principal and interest payments received from the franchisee as a reduction of the carrying value of the note. At such time as the franchisee's investment exceeds 20% of the purchase price, the Company will reconsider whether recognition of a gain on the transaction is then appropriate.

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Shareholders' Equity

3 Months Ended

May 05, 2013

Disclosure Of Compensation Related Costs Share Based Payments And Repurchase Of Shares [Abstract]

Disclosure Of Compensation Related Costs Share Based Payments And Repurchase Of Shares[TextBlock]

Note 8 — Shareholders' Equity

Share-Based Compensation for Employees and Directors

The Company measures and recognizes compensation expense for share-based payment (“SBP”) awards based on their fair values. The fair value of SBP awards for which employees and directors render the requisite service necessary for the award to vest is recognized over the related vesting period.

The aggregate cost of SBP awards charged to earnings for the three months ended May 5, 2013 and April 29, 2012 is set forth in the following table. The Company did not realize any excess tax benefits from the exercise of stock options or the vesting of restricted stock or restricted stock units during any of the periods.

			Three Months Ended
			May 5,		April 29,
			2013		2012
			(In thousands)
Costs charged to earnings related to:
	Stock options		$	217	$	827
	Restricted stock units			729		550
		Total costs	$	946	$	1,377
Costs included in:
	Direct operating expenses		$	496	$	370
	General and administrative expenses			450		1,007
		Total costs	$	946	$	1,377

Repurchases of Common Stock

Pursuant to the authorization of its Board of Directors, from March 27, 2012 through June 28, 2012, the Company repurchased $20million of its common stockat an average price per share of $6.42. Through April 29, 2012, the Company repurchased 255,000 shares at an average cost of $7.27 per share, for a total cost of $1.9 million, of which approximately $1.3 million was settled prior to quarter end.

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Segment (Tables)

3 Months Ended

May 05, 2013

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

					Three Months Ended
					May 5,		April 29,
					2013		2012
					(In thousands)
Revenues:
	Company Stores				$	81,921	$	73,341
	Domestic Franchise					2,871		2,633
	International Franchise					6,445		6,027
	KK Supply Chain:
		Total revenues				59,811		53,785
		Less – intersegment sales elimination				(30,423)		(27,290)
			External KK Supply Chain revenues			29,388		26,495
				Total revenues	$	120,625	$	108,496
Operating income:
	Company Stores				$	5,314	$	2,948
	Domestic Franchise					1,439		1,569
	International Franchise					4,531		4,494
	KK Supply Chain					10,239		8,477
		Total segment operating income				21,523		17,488
	Unallocated general and administrative expenses (including depreciation
		and amortization)				(6,331)		(6,623)
	Impairment charges and lease termination costs					(8)		(31)
		Consolidated operating income			$	15,184	$	10,834
Depreciation and amortization expense:
	Company Stores				$	2,354	$	2,097
	Domestic Franchise					14		55
	International Franchise					3		3
	KK Supply Chain					173		162
	Corporate administration					276		165
		Total depreciation and amortization expense			$	2,820	$	2,482

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Accounting Policies (Policies)

3 Months Ended

May 05, 2013

Accounting Policies [Abstract]

Basis Of Presentation [Policy Text Block]

BASIS OF PRESENTATION. The consolidated financial statements contained herein should be read in conjunction with the Company's 2013 Form 10-K. The accompanying interim consolidated financial statements are presented in accordance with the requirements of Article 10 of Regulation S-X and, accordingly, do not include all the disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) with respect to annual financial statements. The interim consolidated financial statements have been prepared in accordance with the Company's accounting practices described in the2013 Form 10-K, but have not been audited. In management's opinion, the financial statements include all adjustments, which consist only of normal recurring adjustments, necessary for a fair statement of the Company's results of operations for the periods presented. The consolidated balance sheet data as of February 3, 2013 were derived from the Company's audited financial statements but do not include all disclosures required by GAAP.

Consolidation, Policy [Policy Text Block]

BASIS OF CONSOLIDATION. The financial statements include the accounts of KKDI and its subsidiaries, the most significant of which is KKDI's principal operating subsidiary, Krispy Kreme Doughnut Corporation.

Investments in entities over which the Company has the ability to exercise significant influence but which the Company does not control, and whose financial statements are not otherwise required to be consolidated, are accounted for using the equity method. These entities typically are 25% to 35% owned and are hereinafter sometimes referred to as “Equity Method Franchisees.”

Earnings Per Share, Policy [Policy Text Block]

EARNINGS PER SHARE. The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share reflects the additional common shares that would have been outstanding if dilutive potential common shares had been issued, computed using the treasury stock method. Such potential common shares consist of shares issuable upon the exercise of stock options and warrants and the vesting of currently unvested shares of restricted stock and restricted stock units.

The following table sets forth amounts used in the computation of basic and diluted earnings per share:

Stock options and warrants with respect to 617,000and 2.3million shares for the three months ended May 5, 2013 and April 29, 2012, respectively, have been excluded from the computation of the number of shares used to compute diluted earnings per share because their inclusion would be antidilutive.

Comprehensive Income Policy [Policy Text Block]

COMPREHENSIVE INCOME. Accounting standards on reporting comprehensive income require that certain items, including foreign currency translation adjustments and mark-to-market adjustments on derivative contracts accounted for as cash flow hedges (which are not reflected in net income) be presented as components of comprehensive income. The cumulative amounts recognized by the Company under these standards are reflected in the consolidated balance sheet as accumulated other comprehensive income, a component of shareholders' equity.

Prior Period Reclassification Adjustment Description [Policy Text Block]

CORRECTION OF BALANCE SHEET CLASSIFICATION ERROR.The Company's KK Supply Chain transfers doughnut mixes and certain other goods to third-party distribution companies which, in turn, distribute such products to Company and franchise stores pursuant to distribution contracts with KK Supply Chain. The Company does not record revenues or profit on the product transfers to the distribution companies because all revenue recognition criteria are not met at that time. Revenues and profit are recorded only upon the delivery of the goods to the stores by the distribution companies (and the sales to Company shops are eliminated in consolidation). In the fourth quarter of fiscal 2013, the Company concluded that certain of the Company's receivables from third-party distribution companies resulting from the product transfers had been incorrectly reported as a component of inventories, rather than as a component of receivables, in prior periods. The Company corrected this classification error as of February 3, 2013. While not material to previously issued financial statements, to enhance comparability, the Company corrected the corresponding error as of April 29 and January 29, 2012, by revising the classification of $3.8 million and $3.9 million, respectively, of receivables from the distribution companies previously classified as inventories to receivables. The error also affected the change in inventories and change in receivables line items in the statement of cash flows in the first quarter of fiscal 2013, but there was no effect on net cash provided by operating activities.  The Company revised its statement of cash flows to adjust the increase in receivables from $261,000 to $155,000 and to adjust the decrease in inventories from $588,000 to $482,000 in first quarter of fiscal 2013. Correction of this error had no effect on the Company's results of operations, total current assets, working capital, or total operating, investing, or financing cash flows.  

New Accounting Pronouncements Policy [Policy Text Block]

In February 2013, the FASB issued guidance requiring an entity to provide information about the amounts reclassified out of accumulated other comprehensive income (“AOCI”) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no material effect on the Company's consolidated financial statements.

In July 2012, the FASB issued amended accounting guidance regarding indefinite-lived intangible asset impairment testing. The amended guidance permits, but does not require, an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not, the indefinite-lived intangible asset is impaired. This guidance is effective for the Company in fiscal 2014, with early adoption permitted. The Company adopted this new guidance in the first quarter of fiscal 2014. Such adoption had no effect on the Company's consolidated financial statements.

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Document and Entity Information	3 Months Ended
	May 05, 2013	Jun. 02, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	May 05, 2013
Amendment Flag	false
Entity Registrant Name	KRISPY KREME DOUGHNUTS INC
Entity Central Index Key	0001100270
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--02-02
Entity Filer Category	Accelerated Filer
Entity Well Known Seasoned Issuer	Yes
Entity Common Stock Shares Outstanding		65,486,521
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

XML

Accounting Policies (Tables)

3 Months Ended

May 05, 2013

Accounting Policies [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block]

			Three Months Ended
			May 5,		April 29,
			2013		2012
			(In thousands)
Numerator: net income			$	7,999	$	6,026
Denominator:
	Basic earnings per share - weighted average shares outstanding			67,012		69,562
	Effect of dilutive securities:
		Stock options and warrants		2,751		1,781
		Restricted stock units		815		545
	Diluted earnings per share - weighted average shares
		outstanding plus dilutive potential common shares		70,578		71,888

Schedule Of Accumulated Other Comprehensive Income Loss Table Text Block

		May 5,		April 29,
		2013		2012
		(In thousands)
Accumulated other comprehensive loss:
	Unrealized losses on cash flow hedge	$	(542)	$	(547)
	Less: deferred income taxes		210		212
	Balance at the end of the period, net of tax	$	(332)	$	(335)