Yum! released its second quarter earnings report after closing bell tonight, posting adjusted earnings of 69 cents per share on revenue of $3.11 billion in revenue. Analysts had been expecting earnings of 63 cents per share and $3.2 billion in revenue for the quarter. In the same quarter last year, the fast food chain operator reported earnings of 73 cents per share and revenue of $3.2 billion.
Key metrics from Yum! Brands’ earnings report
Reported earnings were 53 cents per share for the second quarter.
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Yum reported a 3% increase in worldwide system sales but a 1% decline in worldwide operating profits. Worldwide restaurant margin remained flat at 15.5%. The fast food chain operator added 291 restaurants during the quarter, with 75% of them appearing in emerging markets.
Looking ahead, management expects at least a 10% increase in full year earnings per share due to an expected better second half in China and strong performance in the KFC and Taco Bell segments. They also expect to set a new record for restaurant openings this year by opening 2,100 new restaurants with a special focus on emerging markets.
Yum! Brands’ earnings by division
In China, Yum! Brands reported a 4% decline in system sales and a 10% decline in same store sales, which more than offset the 7% unit growth recorded in the country. Restaurant margin in the segment fell 2.2 percentage points, while operating profit fell 25%.
System sales in the KFC division increased 6% on a 2% increase in units and 3% increase in same store sales. The Pizza Hut division saw a 1% increase in system sales on the back of a 2% increase in unit growth and flat same store sales. The Taco Bell segment saw a 9% increase in system sales due to a 3% increase in units and a 6% increase in same store sales.
System sales in India were flat as an 11% decline in same store sales was offset by a 16% increase in units.
As of this writing, shares of Yum! Brands were down 1.2% at $90.90 per share in after-hours trades.