Shares of Yum! Brands edged upward by as much as 2.51% to $75.50 per share in after-hours trading
Yum! Brands released its fourth quarter earnings report after closing bell tonight, posting adjusted earnings of 61 cents per share, a 29% year over year decline, on revenue of $4 billion. Analysts had been expecting the fast food chain operator to post earnings of 66 cents per share on $3.97 billion in revenue.
Yum! Brands’ fourth quarter earnings
Yum Brands posted a loss of 20 cents per share for the fourth quarter and earnings of $2.32 per share for the full year. The company took a non-cash charge of $361 million in connection with the write-down of Little Sheep assets.
Worldwide system sales improved 3%, although the restaurant margin to 10.2% in the fourth quarter. Operating profits fell 24% in the quarter. System sales in China declined 11% as 8% unit growth was offset by a 16% same store sales decline in the country during the quarter.
System sales for the KFC Division improved 7%, while Pizza Sales improved 2% and Taco Bell sales rose 9%. Sales from the India division rose 6% during the fourth quarter.
Full year results from Yum Brands
For the full year, system sales improved 3%, although the restaurant margin fell 0.5 percentage points to 14.5% during the year. The company opened a record 2,034 new international restaurants during the year, including 737 in China, 666 new KFC locations, 465 Pizza Hut locations and 156 stores in India.
Full year sales in China increased 1%, while KFC sales increased 6% and Pizza Hut sales improved 1%. Sales in the Taco Bell division increased 4%, while sales in India rose 14%.
Yum Brands continues to recover in China
Yum Brands CEO Greg Creed said in a statement that they aim to get back to delivering 10% or greater annual earnings per share growth each year. He believes they will do it this year as their China business recovers and they continue momentum in their other segments. He added that the recovery in China hasn’t gone as fast as they had expected, but they think the second half of this year will be strong.
The company expects to open more than 2,100 new international restaurants this year.