The shares of Krispy Kreme Doughnuts (NYSE:KKD) suffered a steep decline today after the company lowered its earnings outlook for the full year 2015, citing the fact that its sales performance for the first quarter was weak and rising costs.

Krispy Kreme

The stock price of the doughnut chain was down more than 14% to $16.25 per share as of 12:45 PM ET in New York.

Full-year outlook

Krispy Kreme Doughnuts (NYSE:KKD) said its adjusted net income for the fiscal 2015 will be in the range of $48 million and $51 million or $0.69 and $0.74 per share.

The company previously estimated that it would be able to deliver adjusted earnings of around $51 million to $55 million or $0.73 to $0.79 per share for the full year.

The doughnut chain known for its hot glazed doughnuts explained that its lowered earnings outlook for the fiscal 2015 reflects an increase in estimated costs related to the implementations of new technology systems, higher compensation costs related to management succession and unfavorable results in the first quarter, among other reasons.

Krispy Kreme Doughnuts (NYSE:KKD) emphasized that if it is be able to achieve its revised earnings guidance, it still represents a growth of between 13% and 21% from its $0.61 adjusted earnings reported in fiscal 2014 and 30% growth from fiscal 2013.

Krispy Kreme first quarter financial results

Krispy Kreme Doughnuts (NYSE:KKD) reported $9.7 million net income of $0.14 earnings per share on $121.6 million revenue for its fiscal 2015 first quarter that ended May 4, 2014.

The company’s adjusted net income was $15.8 million or $0.23 earnings per share.

According to the firm, its system-wide store count increased 3.3% to 855 company and franchise shops globally. Its system-wide domestic store sales went up 2.3% while its constant currency international franchise same store sales dropped 2.2%.

Krispy Kreme Doughnuts (NYSE:KKD) said its operating income climbed 6.6% to $16.2 million and cash from operating activities was $13.7 million during the quarter.

Commenting on the financial performance of the company, Executive Chairman James H. Morgan said, “Severe winter weather adversely affected both on-premises and wholesale sales throughout our company store base in the Southeast, and contributed to a 1.5% decline in same store sales at company shops against a very tough 12.2% same store sales gain in the first quarter last year. Our domestic franchisees, however, were less affected by weather, posted a gain in same store sales of 4.5% on top of an 11.8% rise in the first quarter last year.”

CEO appointment

Last month, Krispy Kreme Doughnuts (NYSE:KKD) appointed Tony Thompson as president and CEO. Thompson previously served as chief operating officer at Papa John’s Int’l, Inc. (NASDAQ:PZZA).

Morgan stated that Krispy Kreme has the “right leader for the next phase” of Krispy Kreme’s development and success. He said, “I am personally delighted to have someone of Tony’s caliber and record of achievement to succeed me as CEO, and am confident that Krispy Kreme Doughnuts (NYSE:KKD)’s future will be rewarding for all of our constituencies in the years ahead.”