Yum earnings beat expectations, revenue misses
Yum Brands reported an 11 percent increase in adjusted earnings that topped analyst expectations, but its revenue came in just under Wall Street estimates.
The company said it had earnings of 68 cents per share (excluding special items) on $3.95 billion in revenue. Analysts had expected Yum to report earnings of about 66 cents per share on $4.02 billion in revenue, according to a consensus estimate from Thomson Reuters.
Shares in the company fell about 1 percent in after-hours trading.
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The restaurant giant said its worldwide system sales grew 6 percent in the fourth quarter, and its worldwide restaurant margin increased 3.4 percentage points to 13.6 percent.
Adjusted earnings of 68 cents represented an 11 percent increase from 61 cents during the year-ago period, and total revenues of $3.951 billion were a 1 percent decrease from $3.997 billion during the fourth quarter of 2014.
In the quarter, Yum said its new global restaurants totaled 1,160 — with 384 in China, 374 at KFC, 270 at Pizza Hut, 109 at Taco Bell and 23 in India.
In China specifically, Yum said system sales increased 7 percent in the quarter — with 7 percent unit growth and a 2 percent rise in same-store sales.
In the fourth quarter, KFC saw its sales increase 6 percent, Pizza Hut sales grew 2 percent and the company's Taco Bell division reported a 7 percent rise in system sales, Yum said.
"I'm pleased with the positive sales momentum we generated across the majority of Yum! in the fourth quarter," CEO Greg Creed said in a statement. "KFC China, for example, grew same-store sales 6% in the last quarter of 2015. Outside of China, each of our brand divisions grew same-store sales on a one-year and a two-year basis. Our U.S. results were particularly strong on a two-year basis, with growth of 2% at Pizza Hut, 8% at KFC and 10% at Taco Bell."
Looking ahead, Creed said 2016 will be a "transformational year" for the company because of its China division spin-off, which will create "two powerful, independent, focused growth companies."
Yum Brands said in December that it planned to return up to $6.2 billion to shareholders before completing the separation of its China business, which is expected by the end of 2016.
The KFC and Pizza Hut parent, which has been hit by food scandals and marketing missteps in China, had previously revealed that same-restaurant sales in that country fell about 3 percent in November.
In good news for the food giant, a Shanghai court recently fined three tech firms for helping spread rumors about KFC that included doctored photos of deformed chickens and allegations the birds had six wings and eight legs.
— Reuters contributed to this report.