Low-carb craze puts hole in Krispy Kreme profits

The low-carb diet craze is taking a bite out of Krispy Kreme.

The doughnut company’s shares tumbled 29 percent Friday in trading after it lowered its earnings forecast by 10 percent for the year, in part because of increasing consumer interest in the Atkins diet.

The changing dietary habits has hurt makers of bread, cereal and pasta, said Scott Livengood, president and chief executive of the Winston-Salem, N.C.-based company.

“This trend had little discernible effect on our business last year,” he said. “However, recent market data suggests consumer interest in reduced carbohydrate consumption has heightened significantly following the beginning of the year and has accelerated in the last two to three months.”

In March, Krispy Kreme unveiled plans to offer a low-sugar doughnut to appeal to customers watching their carbohydrates.

Above, a Krispy Kreme employee boxes up a dozen doughnuts Friday as they come off a production line at a Krispy Kreme store in Raleigh, N.C.

Wall Street

Martha Stewart company losses continue to grow

Martha Stewart Living Omnimedia Inc. reported a bigger-than-expected first-quarter loss Friday as advertising revenue declined and the company struggled with the fallout from Stewart’s felony conviction.

The company also said it planned to place greater emphasis on the name “living” in its Martha Stewart Living magazine, starting with the September issue.

For the three months that ended March 31, Martha Stewart Living Omnimedia reported a loss of $20.26 million, or 41 cents per share, in contrast to a loss of $4.51 million, or 9 cents per share, in the same period a year ago.

International

Conference examines East Asian economies

In 30 to 40 years the Chinese economy may become larger than the U.S. economy, participants in a Kansas University conference said Friday.

KU’s Center for East Asian Studies, the Consulate General of Japan in Kansas City and the Japan External Trade Organization sponsored the conference, which featured a panel discussion on the changes in the East Asian economy.

Arthur Alexander, a Georgetown University professor, said Americans should hope for strong growth of the Chinese economy. He said financial success for the Chinese would open new sales opportunities for American businesses.

Alexander said Americans should be more concerned about the Chinese economy faltering. He said that could lead to a breakup of the country similar to what happened in Yugoslavia.

“One of the big differences, though, is that Yugoslavia didn’t have nuclear weapons,” Alexander said.

The event also featured Tsuneo Watanabe, a senior fellow of Japan Studies at the Center for Strategic and International Studies, and Koichi Ishikawa, a senior researcher at the Japan External Trade Organization.