Lawsuit Claims Krispy Kreme Knew Early of Slowing Sales

Summary

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CHARLOTTE, N.C. -- Krispy Kreme Doughnuts Inc. knew by January 2003 that sales were slowing long before a May 2004 profit warning according to documents filed in a shareholder lawsuit.

Citing reports from unidentified employees, plaintiffs claim Krispy Kreme knew its rapid expansion was saturating markets. Indeed, former company and franchise employees told plaintiff's lawyers that Krispy Kreme by mid-2003 was double-shipping wholesale orders to some grocers at the end of quarterly reporting periods in order to boost sales and earnings results temporarily, even though executives knew many of the doughnuts would be returned for credit later.

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Extract

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Lawsuit Claims Krispy Kreme Knew Early of Slowing Sales

A former sales manager at Krispy...

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