Yum! Brands' Stock Soars on Earnings, Despite Slowing Sales in China

Yum! Brands (NYSE: YUM  ) delivered better-than-expected fourth-quarter earnings after the bell on Monday. For the period ended in December, Yum! Brands reported a profit of $0.86 per share, excluding certain items, up 4% from the same period a year ago. That was significantly better than Wall Street's forecasts for earnings per share of $0.80 in the quarter. Meanwhile, fourth-quarter revenue came in at $4.18 billion, which compares to analyst estimates for quarterly revenue of $4.26 billion in the period .

Source: Yum! Brands.

Nevertheless, the Chinese market continued to be a sour point for the chain, as Yum!'s same-store sales declined 4% in the region. The fast-food chain, whose brands include Pizza Hut, KFC, and Taco Bell, suffered from a challenging retail environment abroad in 2013. In fact, analysts had low expectations for Yum!'s December quarter because of ongoing worries over the bird flu in China, which tarnished the company's brand image in the Asia-Pacific market last year.

Coming off a challenging year, Yum! Brands CEO David Novak expects the company to make meaningful progress in the year ahead. "With the decisive actions we've taken to strengthen our company across the board, we are well positioned to deliver double-digit EPS growth in 2014 and the years ahead," Novak said.

In the United States, Yum! continues to find strength in its Taco Bell brand. In fact, the fast-food taco chain celebrated its eighth consecutive quarter of same-store sales growth in the fourth quarter. Going forward, Yum! Brands expects to deliver at least 20% earnings per share in 2014.

Shares of Yum! Brands were trading higher at around $68.62 as of 5:15 p.m. ET today.


Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 03, 2014, at 10:08 PM, ChinaFinancial wrote:

    Is there any data tracked Average Per Store Sales declining or rising ?

    same-store numbers has added from Q4,2012 to Q4,2013

  • Report this Comment On February 03, 2014, at 10:11 PM, ChinaFinancial wrote:

    Q4 profit is better than estimate is a surprising us since we worried they had spent too much money on Ads and aggressively discount

  • Report this Comment On February 03, 2014, at 11:44 PM, FrankoJames wrote:

    Hello Tammy; I would like to see a value menu added into the product mix at Tacobell. Noteworthy; I cracked my Iconia this morning and am currently trying to utilize the keyboarding functionality of a second generation Amazon Kindle tablet before the polaris star or something like a polaris collapses into the earth nineteen minutes from now. Noteworthy; I lost my notebook. Long live YUM.

Add your comment.

DocumentId: 2821613, ~/Articles/ArticleHandler.aspx, 8/1/2014 2:01:41 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement