Charlotte, N.C. ? Once the darling of Wall Street, doughnut-maker Krispy Kreme reported second-quarter profits Thursday that were less than half what the company earned a year ago, widely missing analysts’ expectations. Shares of Krispy Kreme Doughnuts Inc. fell 10 percent on the news.

In years past, meeting or surpassing Wall Street’s expectations was nearly a foregone conclusion for the folks at Krispy Kreme, which went public amid much fanfare in 2000 and posted quarter after quarter of profits.

However, on Thursday the Winston-Salem, N.C.-based company said it expected slower sales for the remainder of the year. And it declined to project its earnings for the third quarter or for 2005.

“Although we are disappointed with the second-quarter financial results, we are optimistic about the long-term growth potential of the business,” said chief executive CEO Scott Livengood.

Speaking to analysts on a conference call, Livengood said the company was going to make drastic changes to its business model. The company lowered its estimate for new stores, saying it now plans to open about 75 stores next year, down from about 100 stores planned in May.

“Our primary focus over the last six years was on growth,” he said. “Building stores and our brand overshadowed building profit. . . Now, our first priority will be to make our stores as profitable as they can be.”

He said management has not paid enough attention to fundamentals.

“We have not gotten the job done with new stores when it comes to the bottom line,” Livengood said. “This will no longer be the case.”

Krispy Kreme earned $5.7 million, or 9 cents per share, in the three months ending Aug. 1, compared with $13 million, or 21 cents per share, a year earlier. Excluding discontinued operations and other items, the company posted earnings of $7.3 million, or 12 cents per share, in the latest quarter. This widely missed analyst expectations of profits of 22 cents per share, according to Thomson First Call.

Total sales rose $177.4 million, up 11.5 percent, in the second quarter. On a comparable-store basis, systemwide sales were up 0.1 percent and company store sales rose 0.6 percent, the company said.

Maria Pereira, center, and Susan Jackson, right, load up glazed doughnuts for customers at a Krispy Kreme Doughnuts Inc. store. They were working Tuesday at the doughnut shop in the Dupont Circle neighborhood of Washington. Krispy Kreme shares closed down .59, or 10.35 percent, to 3.77 Thursday on the New York Stock Exchange after reporting second-quarter profits that widely missed Wall Street's expectations.