Talk about overcoming adversity. Back in February, Yum! Brands
On Monday, the fast-food operator announced impressive results displaying the benefits from international expansion. While there was essentially no growth domestically, China led the company to a 20% increase in earnings per share and a 16% boost in operating profits. Overall revenue growth of 13% was driven from the company's international division, which posted a 43% jump in sales. Meanwhile, U.S. sales were down 6%.
The company also revealed plans to proceed with a $4 billion share repurchase over the course of the next two years. This is a positive signal from shareholders as the move indicates that management apparently believes that its shares are reasonably valued. This move will continue a trend of buybacks at Yum! Brands that have reduced the company's net share count over the past few years.
Yum! Brands joins a prosperous group of other fast-food chains, such as McDonalds
Shares of Yum! continue remain attractive, trading at a forward P/E 21. The company has also upped its full-year earnings-per-share forecast from 12% to 13% to reflect its strong momentum. The company has done an admirable job of bouncing back from the bad press earlier in the year, and it appears shareholders can expect to see strong growth, at least internationally, for the foreseeable future.
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