Doughnut purveyor Krispy Kreme announced this week that it is pausing adding its products to McDonald's menus throughout the U.S.

Joshua Charlesworth, CEO of Krispy Kreme, told investors that Krispy Kreme doughnuts are now available at 2,400 McDonald's locations throughout the U.S. For now, that number won't go up.

That means that only about 17% of U.S. McDonald's locations will serve Krispy Kreme doughnuts for the foreseeable future.

"We are seeing that after the initial marketing launch, demand drops below our expectations, requiring intervention," he said. "To deliver sustainable, profitable growth, we are partnering with McDonald's to increase sales by stimulating higher demand and cutting costs by simplifying operations.

"At the same time, we are reassessing our deployment schedule together with McDonald's while we work to achieve a profitable business model for all parties. Given this, we do not expect to launch any additional restaurants in Q2."

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McDonald's began serving Krispy Kreme doughnuts in the second half of 2024. The companies had expected full nationwide availability by the end of 2026. Three varieties of Krispy Kreme doughnuts are available: Original Glazed, Chocolate Iced with Sprinkles, and Chocolate Iced Kreme Filled.

Charlesworth seemed to think the partnership could resume expansion at a future time.

"I remain confident in the long-term national opportunity, but we need to work together with them to identify levers to improve sales, simplify operations, and once we're positioned for profitable growth, we'll expand further," he said.

Although the McDonald's expansion is on pause, the company said it is continuing with placing doughnuts in more Costco and Sam's Club locations in the coming months.