NEW YORK (CNN/Money) - Krispy Kreme Doughnuts saw earnings fall much farther than Wall Street expectations Monday as the company backed off earlier growth forecasts.

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The doughnut retailer earned $2.4 million, or 4 cents a share, from continuing operations before special charges in the third quarter ended Oct. 31. That's down from net income of $14.5 million, or 23 a share, in the year-earlier period, and well below the 13 cent EPS forecast of analysts surveyed by earnings tracker First Call.

Shares of Krispy Kreme (Research) lost $1.25, or about 11 percent, to $10.25 in pre-market trading on INET following the report.

Including special items and discontinued operations, the company posted a net loss of $3 million, or 5 cents a share.

Along with the cost of some store closings, Krispy Kreme made a $2 million allowance for doubtful accounts from two franchisees. It also said it spent $3 million in connection with the previously announced Securities and Exchange Commission investigation into its accounting.

"Clearly we are disappointed with our third-quarter results," said Chairman and CEO Scott Livengood in a statement. "We are focused on addressing the challenges facing the company and regaining our business momentum."

Revenue in the quarter rose 1.4 percent to $170.1 million, but that also missed First Call forecasts of $180 million. Company store sales increased 9.6 percent to $121.2 million.

But revenue from franchise operations decreased 5.4 percent to $6.2 million and revenue from its manufacturing and distribution division dropped nearly 16 percent to $42.7 million.

The company did not give a reason for withdrawing its previously disclosed guidance regarding systemwide sales growth, but said it would not give sales or earnings targets for the current quarter.

Krispy Kreme's previous sales guidance had called for full-year revenue of $765.4 million, up from $665.6 million. When it gave that guidance analysts had been looking for revenue about $786 million. Analysts' consensus revenue forecast has since fallen to $729 million.

The company again scaled back expansion plans, saying it is now looking at opening 10 new stores during the fourth quarter. That would bring its total number of stores to about 439 systemwide stores, or a gain of 61 for the year.

In its second quarter statement it said it expected to add 75 stores during the fiscal year. It started the fiscal year forecasting 120 new stores.