Yum! Brands, Inc. Beats EPS Estimates, Misses On Revenue

Yum! Brands, Inc. Beats EPS Estimates, Misses On Revenue
By Yum! Brands, Inc. [Public domain], via Wikimedia Commons

Yum! Brands released its latest quarterly earnings report after closing bell tonight, posting earnings of 95 cents per share and revenue of $2.62 billion. Analysts had been expecting earnings of 83 cents per share and $2.66 billion in revenue.

Yum! Brands’ comparable sales climb

Yum’s reported earnings were 93 cents per share, compared to last year’s 81 cents.

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The fast food chain operator said worldwide system sales grew 5% year over year, while same store sales increased 2%. Core operating profits surged by 21% on the back of a 42% improvement in China, and currency headwinds weighed on Yum’s profits to the tune of $28 million. The company opened up 295 new restaurants with 72% of international development coming in emerging markets. Management expects the China separation to be complete by the end of the year.

The China division saw an 11% increase in system sales and 6% increase in same store sales. KFC China saw a 12% increase in same store sales, although Pizza Hut Casual Dining in China saw a 12% decline in same store sales. The KFC division recorded a 5% increase in system sales and 1% increase in same store sales, while Pizza Hut saw a 4% increase in system sales and a 3% increase in same store sales. System sales at Taco Bell grew 3% year over year, while same store sales increased 1%.

Yum! Brands adjusts guidance

Yum management also increased their guidance for core operating profit growth from 10% to 12%. Yum! Brands Chief Executive Officer Greg Creed expressed satisfaction with the first quarter results, especially from China and the Pizza Hut division.

“KFC China had an outstanding Chinese New Year bucket promotion leading to 12% same-store sales growth for the quarter, underscoring the power of delivering insight-driven marketing that resonates with our customers,” Creed said in a statement. “… I’m especially encouraged by the continued turnaround of our Pizza Hut U.S. business, which delivered 5% same-store sales growth.”

Yum! Brands shares surged in after-hours trades, climbing by 3.55% to $85.60.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at [email protected]
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