Class Action Suit Announced Against Krispy Kreme Doughnuts, Inc.

Notice is hereby given by the Law Office of Alfred G. Yates Jr., PC that a class action lawsuit was filed on behalf of all purchasers of the common stock of Krispy Kreme Doughnuts, Inc. ("Krispy Kreme" or the "Company") (NYSE:KKD) between May 7, 2004, and January 4, 2005, inclusive, (the "Class Period").

The action, case number 05-CV-00042, is pending in the United States District Court for the Middle District of North Carolina against defendants Krispy Kreme, Scott Livengood (Chairman, President and CEO), and Michael Phalen (CFO).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Alfred G. Yates, Jr. at 1-800-391-5164 or via e-mail at yateslaw@aol.com. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint alleges that Krispy Kreme is a specialty retailer of doughnuts and charges Krispy Kreme and certain of its officers and directors with violating the Securities Exchange Act of 1934. The complaint alleges that, during the Class Period, Krispy Kreme misrepresented its financial condition to the investing public. The complaint further charges that Company improperly accounted for its reacquisition of certain of its franchisees, thereby artificially inflating its pre-tax income for fiscal year 2004 by as much as $8.1 million.

In a press release dated January 4, 2005, the last day of the Class Period, the Company conceded that it would have to make $8.1 million in write-downs. The day prior to the release, the Company stock traded at an intra-day high of almost $13.00 per share. On the day after the release, KKD stock traded at an intra-day low of $9.36 per share, down a full twenty-eight percent (28%) from its intra-day high just two days earlier.

Contacts

Law Office of Alfred G. Yates Jr., PC, Pittsburgh
Alfred G. Yates, Jr., Esq., 1-800-391-5164
412-391-5164
412-471-1033 (facsimile)
E-mail: yateslaw@aol.com