WINSTON-SALEM, N.C. (AP) -- Krispy Kreme Doughnuts told shareholders Wednesday it would adapt to the hit it's taken from low-carb diets by adding sugar-free doughnuts, smaller doughnuts, iced drinks and brew-at-home coffee.

Chief executive Scott Livengood said it's always possible that customers will return to a "balanced lifestyle" that includes deep-fried treats, but for now the company is operating on the assumption that low-carb dieting is here to stay.

"We're not going to take anything for granted," he said.

The meeting came a day after Krispy Kreme reported its first quarterly loss since going public in 2000. In addition to the $24.4 million loss for the first quarter, the company's stock has fallen by about a third in the past month.

Although the company has blamed trendy, low-carb diets such as Atkins and South Beach, some critics have questioned the company's rapid expansion and wondered if the Krispy Kreme phenomenon has run its course.

Livengood acknowledged to 220 shareholders who attended the meeting that the tumble in Krispy Kreme's stock's price had stunned company executives.

"Frankly, it was beyond anything I could have imagined," Livengood said.

Krispy Kreme responded by closing some shops, trimming its earnings forecast by 10 percent for the year, and slowing down expansion plans. It plans to shut down some of its Montana Mills Bread Co. stores while trying to sell the rest of the 19-store chain it bought only last year. The company reported a loss from discontinued operations of about $34 million.

"With the benefit of hindsight, our timing couldn't be worse relative to the intensification of this low-carb diet phenomenon," Livengood said of the Montana Mills purchase.

Chief operating officer John Tate said the company has accelerated a series of plans already under development to respond to the crisis. He said Krispy Kreme will continue expanding overseas, operate more efficiently and introduce new products.

The company's doughnut shops and grocery displays will start selling a sugar-free doughnut, a chocolate-flavored glazed doughnut, and mini rings that are 40 percent smaller.

Supermarkets, which account for half of Krispy Kreme sales, will also start selling bags of its own brand of coffee in both whole-bean and ground form.

And the doughnut shops will add crushed-ice drinks in raspberry, latte and double chocolate.

The moves come in the face of competition from 4,000-store Dunkin' Donuts, which said it hasn't seen any low-carb effect on sales, in part because the majority of its sales now come from coffee and other beverages.

Krispy Kreme now operates about 400 company-owned and franchised stores in 44 states, Australia, Canada, Mexico and the United Kingdom.

Tate said overseas expansion will focus on Asia and 25 new stores are planned for South Korea. Also on the horizon are sites in Japan, China, Indonesia, the Philippines, and the Persian Gulf.

Most shareholders seemed sympathetic to the new challenges. One, Jim Peebles of Stokesdale, drew applause by congratulating executives for telling shareholders the truth about the profit drop.

Later, Peebles praised the company, saying its handling of the first-quarter loss was similar to an earlier situation in which Krispy Kreme's financing method for an Illinois manufacturing plant was criticized in the post-Enron demands for transparent accounting. The company changed its accounting method.

In both cases, executives "didn't try to cover it up. They were very frank and open," said Peebles, who with his wife, Diane, bought shares shortly after Krispy Kreme went public in 2000.

Krispy Kreme shares fell 23 cents to close at $19.65 Wednesday on the New York Stock Exchange.

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