The 10-second takeaway
For the quarter ended March 24 (Q1), Yum! Brands beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share improved significantly.
Margins increased across the board.
Yum! Brands recorded revenue of $2.74 billion. The 18 analysts polled by S&P Capital IQ predicted a top line of $2.70 billion on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $2.43 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.76. The 22 earnings estimates compiled by S&P Capital IQ predicted $0.73 per share on the same basis. GAAP EPS of $0.96 for Q1 were 78% higher than the prior-year quarter's $0.54 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 29.6%, 60 basis points better than the prior-year quarter. Operating margin was 22.6%, 400 basis points better than the prior-year quarter. Net margin was 16.7%, 580 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $3.10 billion. On the bottom line, the average EPS estimate is $0.71.
Next year's average estimate for revenue is $13.74 billion. The average EPS estimate is $3.29.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,078 members out of 3,208 rating the stock outperform, and 130 members rating it underperform. Among 780 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 760 give Yum! Brands a green thumbs-up, and 20 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Yum! Brands is outperform, with an average price target of $71.85.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.