Hello, everyone, and thanks for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Krispy Kreme Second Quarter 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question- and- answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Christine McDevitt, Krispy Kreme Associate General Counsel. Please go ahead. Thank you. Good morning, everyone. Welcome to Krispy Kreme's Second Quarter 2025 Earnings Call. Thank you for joining us today. This morning, Krispy Kreme issued its earnings press release for the second quarter of fiscal 2025. The press release and an accompanying presentation are available on our investor relations website at investors.krispykreme.com. Joining me on the call this morning are President and Chief Executive Officer Josh Charlesworth and Chief Financial Officer Raphael Duvivier. After prepared remarks, there will be a question- and- answer session. Before we begin, please note that during this call, we will be making forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations, future events, or future financial performance. Forward-looking statements involve a number of risks, assumptions, and uncertainties, and we caution investors that many factors could cause actual results to differ materially from those contained in any forward-looking statements. These factors and other risks and uncertainties are described in detail in the cautionary statements in the company's earnings press release, in the company's annual report on Form 10-K filed with the SEC, and in other filings the company makes with the SEC from time to time. Forward-looking statements represent the company's expectations only as of today, and the company assumes no obligation to publicly update or revise any forward-looking statements except as may be required by law. Additionally, during this call, we will reference certain non-GAAP financial measures. Please refer to our earnings press release on our website for additional information regarding those non-GAAP measures, including a reconciliation to the closest comparable GAAP measures. Raphael will take us through the company's financial performance in a moment, but first, here's Josh. Thank you, Christine, and good morning, everyone. We are sharply focused on our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth. To achieve these goals, we have implemented a comprehensive turnaround plan to deleverage the balance sheet and deliver sustainable, profitable growth through one, refranchising, two, improving returns on capital, three, expanding margins, and four, driving sustainable, profitable U.S. growth. To deleverage the balance sheet, we have halted the quarterly cash dividend and completed the sale of our remaining interest in Insomnia Cookies. Now we are in active discussions to restructure our well-established joint venture with WKS Restaurant Group in the Western U.S., reducing our ownership stake and deploying the proceeds to further pay down debt. As you may recall, we have already initiated the process of refranchising select international markets, including Australia, New Zealand, Japan, Mexico, and the U.K. To improve returns on capital, we are focused on our capital-light international franchise model, while reducing capital intensity in company-owned markets. We have seen exceptional returns growing Krispy Kreme's presence across the world with franchise partners in both well-established markets like South Korea and the Middle East, as well as newer markets like France and Brazil, with minimal capital investment from the company. We expect future international growth to come from franchisees through both new shop openings and fresh delivery door expansion. Door expansion will be through existing sales channels like grocery and convenience, as well as in new channels like club wholesalers and quick service restaurant partners. For example, our franchisee in the UAE has started selling Krispy Kreme at about 50 KFC restaurants with plans for further expansion. In addition, our pipeline of new market entries with franchise partners is strong, with the first Hot Light Theater Shop in Spain opening later this year. In the U.S., we still plan to open a new production hub in Minneapolis later this year, which will be the first Hot Light Theater Shop in Minnesota. Aside from this strategic location, we have reduced investment in new capacity in the U.S., preferring to leverage existing excess capacity for growth. To expand margins, we are simplifying our business model and strengthening operations in the U.S. to reduce costs across the P&L. In support of this, we have already taken the following actions. First, as announced in June, we have ended our McDonald's U.S.A. partnership effective July 2nd. Our efforts to bring our costs related to the partnership in line with unit demand were unsuccessful, making it unsustainable for us. Second, excluding the exited McDonald's doors, we also completed a thorough assessment of our U.S. fresh delivery footprint and identified approximately 1,500 underperforming doors. We've already exited more than half of these in the first half of the year, with plans to complete the remaining closures by year-end. More importantly, we expect to replace these with 1,100 more profitable, high-volume doors this year, of which more than half are already in place. This shift improves overall route profitability and operational efficiency, and we expect it to be immediately accretive to even our margin. Third, we continue to outsource logistics. So far, we have transitioned 40% of U.S. fresh doughnut deliveries to third-party logistics partners. This provides more predictable logistics costs and allows our Krispy Kremers to focus more on what they do best, make fresh doughnuts and bring joy to our consumers. Finally, we made a 15% reduction in G&A roles in our support center. We are also strengthening our U.S. operations under the leadership of our new Chief Operating Officer, Nicola Steele. Her focus includes boosting our demand planning capabilities to improve forecasts and loadouts while optimizing labor and reducing costs and waste, driving sales while minimizing product returns. She's also raising the caliber of our operations leadership, empowering Krispy Kremers with better training and technology resources, and streamlining the doughnut manufacturing process. To drive sustainable, profitable growth in the U.S., our marketing focus has shifted to our Original Glazed doughnut, our most affordable, most profitable, and most iconic product, typically sold by the dozen. We launched an all-new multimedia marketing campaign centered on the joy of experiencing a hot, fresh Original Glazed, which kicked off on National Doughnut Day in June. Early results are encouraging, with the campaign driving incremental sales and renewed excitement around our signature core offering. Expansion in the U.S. is focused on growing fresh delivery through profitable, high-volume doors with major customers like Costco, Walmart, Target, and Kroger. We added over 400 doors with these customers in the second quarter alone, including the promising new multi-city pilot with Sam's Club. All of this expansion was complemented by strong digital growth, which increased by double digits and accounted for more than 20% of U.S. retail sales during the quarter. We have also recently been awarded additional shelf space at Walmart on top of our existing merchandising towers and cabinets. We expect this to both increase sales at existing Walmart stores and help us add distribution in new stores. Today, we are only represented at about 30% of their total domestic footprint. I have full confidence in our turnaround plan, not only because of the bold strategic actions we are taking, but also because of the strength of our leadership team and the talent across the organization. To drive alignment and execution, we have revised our bonus opportunity for the second half of 2025 to focus on driving adjusted EBITDA and free cash flow, two KPIs clearly linked to profitable growth and deleveraging our business. On a topic of talent, we recently promoted Alison Holder to Chief Brand and Product Officer and Raphael Duvivier to Chief Financial Officer. Alison has over 25 years of experience at Krispy Kreme, holding leadership roles across brand marketing, innovation, research and development, and manufacturing services. We have the utmost confidence in her as she assumes responsibility for our global marketing efforts, focusing on championing the iconic Original Glazed doughnut and driving sustainable, high-quality growth. Raphael has been with Krispy Kreme for over six years and has held multiple leadership roles spanning international development, strategy, finance, and operations. He has a deep understanding of our business, strong financial acumen, and is a trusted partner with a proven track record. Before I hand the call over to Raphael, while we are pleased to have generated quarterly net revenue above the midpoint of our guidance, adjusted EBITDA was below our expectations primarily due to the following factors. First, losses related to our now ended McDonald's U.S.A. partnership were more than originally projected. We are quickly removing our costs related to the McDonald's partnership and expect to begin recouping profitability in the third quarter. Second, during the quarter, we incurred higher insurance costs related to our own delivery efforts. The transition to outsourced U.S. logistics is expected to provide greater cost certainty. We are already seeing more predictable logistics costs for the routes outsourced to date. In summary, whilst the past several quarters have certainly been challenging, we have pivoted and are executing our comprehensive turnaround plan with the actions we believe necessary to position the business for long-term success. With that, Raphael will now review our second quarter financials. Thank you, Josh. Before we cover the results, I wanted to take a moment to introduce myself and express how honored I am to take on the CFO role of this beloved brand. I have been with Krispy Kreme for over six years, leading our international business. Krispy Kreme is at an inflection point, and to position us for sustainable, profitable growth, my immediate focus is on three things, deleveraging the business, improving profitability in the U.S. during the second half, and leading our refranchising efforts. We are shifting our focus to our more capital-light franchise model, which I strongly believe will provide a high return on capital and profitable, predictable growth. I'm confident that we'll be able to bring in the right franchise partners to expand the business and continue our development growth. In the near future, our capital-light international franchise model will make our company look quite different than it does today. We believe our current liquidity provides us with the flexibility to meet both short-term obligations and long-term investments. With the amendment of our credit facility in May, we now have over $200 million of excess liquidity as of the end of Q2. We expect this to enable the full implementation of our 2025 strategy as we continue to strengthen our balance sheet and deliver the business. Shifting to the quarter, net revenue was $379.8 million, reflecting a $64.2 million reduction related to the divestiture of Insomnia Cookies in the third quarter last year, coupled with an organic revenue decline of 0.8%, driven by lower transactions related to consumer softness. Adjusted EBITDA was $20.1 million, down from $54.7 million last year, impacted by a combination of the divestiture of Insomnia Cookies and losses from the now ended McDonald's USA partnership. Turning to the U.S. segment, we encouraged the retail transactions to sequentially improve through the quarter, reflecting our emphasis on the regional glaze. Despite this, expected consumer softness still led to retail transaction decline compared to last year. We also continue to strategically close underperforming doors. These two factors led to a 3.1% organic revenue decline. Adjusted EBITDA was $9.9 million, down from $32.7 million last year, impacted by the sale of Insomnia Cookies in the third quarter of 2024, an estimated $7 million- $9 million impact from our now ended McDonald's USA partnership and retail transaction decline. Here today, the adjusted EBITDA impact related to McDonald's USA is an estimated $13 million- $15 million. Within our equity-owned international markets, organic revenue grew 5.9%, driven by point of excess growth in Canada, Mexico, and Japan. These markets continue to see the benefit of rolling out our hub and spoke model in a target fashion geared towards strategic customers and driving expansion with new shop development generating significant foot traffic. This includes Costco and new theaters in Canada, as well as new theaters in Mexico and Japan. The growth in organic revenue was partially offset by 177 strategic door closures in Japan and Mexico. Adjusted EBITDA of $18.2 million resulted in a margin rate of 13.7%, as lower transaction volumes impacted operating leverage, particularly in the U.K. Importantly, the U.K. market improved margins sequentially, and we are looking forward to the continued progress from the new leadership team now in place. In the market development segment, organic revenue declined 14.2%, as growth in new markets such as Brazil and existing markets like the Middle East were offset by the timing of product and equipment sales. Adjusted EBITDA was $8.9 million, with a margin rate roughly flat year-over-year at 52.9%. During the second quarter, we incurred $407 million in non-cash impairment charges. This was made up of the following, partial goodwill impairment of $356 million related to a quantitative assessment of goodwill, triggered mainly by the decline in our market cap, long-lived asset impairment charges of $22 million, and lease impairment and termination costs of $29 million. These impairments were impacted in part by the termination of the agreement with McDonald's U.S.A. Again, these charges are non-cash and notably do not have an impact on the company's compliance with our financial provenance under debt arrangements. Adjusted EBITDA similarly impacted cash flow, as we used $32.5 million in cash for operating activities on a year-to-date basis. Our bank leverage ratio was 4.5% at the end of the quarter, which is below the 5 leverage ratio limit in our credit facility. Our net leverage ratio, which reflects the company's net debt divided by its trailing four quarters' adjusted EBITDA, was 7.5%, impacted by the cyber incidents for which we have not yet been fully reimbursed by insurance, as well as our now ended McDonald's U.S.A. partnership. We are focused on improving profitability to benefit both leverage and cash flow through not only operational actions that Josh outlined, but also driving improvement in working capital and further at G&A savings. Additionally, I have been overseeing the process of refranchising our international equity markets. I believe that it is the right way to unlock continued sales growth and unit development in these markets, while allowing us to significantly deleverage. We will continue to proceed prudently, seeking to refranchise only with well-capitalized, scaled operators with regional expertise and the capability to drive continued growth. With that, I'll turn it over to Josh for his closing remarks. Thanks, Raphael. In summary, we are highly focused on our comprehensive turnaround plan to deleverage the balance sheet and deliver sustainable, profitable growth through one, refranchising, two, improving returns on capital, three, expanding margins, and four, driving sustainable, profitable U.S. growth. With this plan in place, I am confident in our ability to capitalize on the significant growth opportunity ahead and share the joy of Krispy Kreme with more people in more places around the world. Operator, let's now open it up for Q&A, please. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Rahul Krotthapalli with JP Morgan. Good morning, guys. Thanks for all the color, Josh, Raphael. My question is on the DFD doors. This comes with a significant last-mile delivery cost, as you guys know. Are there tools to better manage profitability per drop, even when employing the third-party strategy? Might some of this include introduction of products with longer shelf stability, which was done in the previous era? I have a follow-up. Good morning. It's important with the DFD model to understand that when the conditions are right in high-traffic doors, when in-store visibility is high, the volumes are high, and that's when we see sustainable, profitable sales. We actually see that with several of our customers already today in the U.S. and are continuing to expand with them. That, combined with the shift to third-party logistics, means that we then have predictable costs to go with that. We've obviously shifted the business model and implemented this turnaround plan that we've shared today to ensure sustainable, profitable sales. The actions we're taking are all about making sure that we drive profitable, sustainable sales and deleverage the company going forward. Thank you. Of the 240 Hot Light Theaters or so in the U.S., these are often located in the higher-cost retail areas. Can we consider driving more productivity out of the onsite customer visits or perhaps consolidating more capacity into fewer stores as we go through this turnaround? There is definitely an opportunity with the production hubs to make sure that we optimize efficiency. Nicola, our new C O O, is very focused on that. She's identified opportunities definitely within the system as we optimize the DFD footprint and then expand with these high-traffic DFD partners to make sure that they get more efficient over time. That is certainly the case. Perfect. One last one, if I may. I did see the update on the international businesses on refranchising, which we have been discussing for a while. Can you share how, as an organization today, you're handicapping the duration risk of executing this? These are large assets and they're spread over multiple geographies. How quickly, for lack of a better term, can we look at executing this in your view? Hey, how are you? This is Raphael. Thank you. Look, we are targeting doing one to two deals this year. I feel confident about this. We have initiated the process, as I mentioned, on Japan, Mexico, U.K., and Australia. We will use the proceeds to deleverage and repay downward debt. Thank you, guys. Your next question comes from Daniel Guglielmo with Capital One Securities. Hi, everyone. Thank you for taking my question. I appreciate the turnaround plans. When thinking about the four components, are you able to get started on all four of those at the same time, or is one more important to get going on first before you can really jump in to the others? Thanks. We've already implemented this turnaround plan. Those actions are already underway. Raphael referenced the process for international refranchising. We also shared today that we are in active discussions with our Western U.S. joint venture partner for them to move to the franchise model. Regarding the other activities, such as optimizing the DFD footprint, implementing the third-party logistics, making the cuts to G&A, these are things that we have already put in place. That means we expect to see the benefits already within this year. I would expect the EBITDA to be higher in the second half of the year than in the first half. I would expect cash flow to be positive. These are things that are very much already in play. Great. I appreciate that. That makes sense. I think it was on the last call, we had talked about potentially rationalizing, I guess, if you had. Is that still kind of a number? Does that go into there kind of? Unfortunately, Daniel, the line broke up there. You said we've been talking about rationalizing, and then it broke up. Do you mind repeating, please? Yep, for sure. We had talked about rationalizing about 5%- 10% of the DFD doors in the U.S., and I'm curious, is that kind of still in the works? Is that kind of a good number? Does it go into the franchising of some of the properties out west, or how are you guys thinking about that now? What we've chosen to do, following the exit from McDonald's, is look at our whole footprint. We identified 1,500 doors that were below average weekly sales, so much less profitable. We're already well on our way of intervening on those, all at the same time while adding higher weekly sales doors with major customers like Target, where we've seen a lot of growth this year, Walmart, and we're growing in Costco. That is a shift we're making as part of the turnaround plan. Going forward, we would expect, once that is complete, a small amount of churn, probably around 5% a year. This is a decisive intervention to get profitable sales increased in the back half of this year as part of the turnaround. Great. Thank you. Appreciate all the color. Your next question comes from Sarah Senatore with Bank of America. Thanks. One question, and then, first a clarification. I'm sorry, I came on the call a little bit late, and I wanted to understand your thoughts about CapEx. I know historically you kind of guided to percentage of revenue, you know, 7%- 8%. I wanted to make sure that that's part of the sort of more capital-light approach, bringing that down more in line with perhaps where some of the franchise businesses might be. That was point one, and I apologize if I missed it. Point two, I guess, is a bigger question, which is, it sounds like some of what you're talking about now as this turnaround is unraveling what were initial growth drivers, like, I think insourcing some of the logistics and production or this QSR partnership. I guess I'm trying to understand what a steady-state Krispy Kreme should look like. Is it more of a CPG company? Should it be perhaps part of a bigger portfolio? It feels like the strategy has shifted a bit, and I'm trying to envision the long-term structure. Thanks. Hey, how are you, sir? I'll take the first one. As we think about our new and better model, our capital-light model, you would expect and should expect lower capital, higher NB to cash conversion, higher margin, and even more important, a more predictable model. As we move our international refranchising efforts, you should start seeing CapEx as a percentage of revenue going down. Even in the second half of this year, as Josh mentioned, we should expect positive cash flow and already lower capital than we had in the first half. To the second question, I think it's important to understand that Krispy Kreme is primarily a growth story. It's more about how we maximize shareholder value as we take advantage of that opportunity. The distribution partnership with McDonald's, although proved unprofitable, hence our decision, we saw significant incremental sales in those geographies, reminding us of the fact this is a growth story because people want access to our fresh doughnut. It's about the model to get there. It's clear that franchising is a capital-efficient way of doing that, particularly internationally. That is clearly going to be the model. To the CapEx point, working with franchisees to take advantage of that development opportunity. Overall, it's still a multi-channel model. You've got opportunities in retail. We're seeing strong digital growth, as we mentioned today. Of course, expansion with major national partners. The multiple channels continue to play a role. The conditions have to be right. This turnaround plan is about making sure that those conditions are right with those DFD accounts in the U.S. or with franchise partners so that we have sustainable, profitable growth and deleverage the balance sheet as we go. Thanks. Again, if you would like to ask a question, press star, then the number one on your telephone keypad. There are no further questions at this time. I'll now turn the conference back over to Josh Charlesworth for closing remarks. Thank you, everybody, for your interest in Krispy Kreme today. Thank you also to our hardworking Krispy Kremers all over the world. We are focused on executing our new business model to maximize shareholder value. The turnaround plan we shared today is in full swing. We are taking the appropriate actions to deleverage the balance sheet and drive sustainable, profitable growth. Thank you again. This concludes today's conference call. You may now disconnect.