Krispy Kreme is exploring options for its Insomnia Cookies unit including a sale, the company said on Tuesday, as it renews its focus on its main business of selling doughnuts.

The move comes at a time when several U.S. packaged food companies, including Campbell Soup and JM Smucker, have struck deals to revamp their brand portfolios amid fading pandemic-era growth and benefits from higher prices.

Insomnia Cookies, which operates in three countries with over 250 bakeries, is expected to deliver revenues of about $230 million in fiscal year 2023, Krispy Kreme said.

For the full year 2022, Krispy Kreme earned a net revenue of $1.53 billion.

Krispy Kreme had acquired a majority stake in Insomnia, the cookie delivery company known for serving warm cookies all day and late into the night, in 2018 but the terms of the deals were not disclosed then.

It was not immediately clear how much stake Krispy Kreme held in Insomnia.

On Tuesday, Krispy Kreme said it now wanted to focus on its core strategy of producing, selling and distributing fresh doughnuts daily.

Krispy Kreme has hired Evercore and Morgan Stanley to act as financial advisors.

The company's shares were up 3% before the bell.

(Reporting by Granth Vanaik in Bengaluru; Editing by Shailesh Kuber)