The 10-second takeaway
For the quarter ended June 15 (Q2), Yum! Brands met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share contracted significantly. GAAP earnings per share shrank.
Margins contracted across the board.
Yum! Brands logged revenue of $2.90 billion. The 19 analysts polled by S&P Capital IQ foresaw revenue of $2.93 billion on the same basis. GAAP reported sales were 8.3% lower than the prior-year quarter's $3.17 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.56. The 23 earnings estimates compiled by S&P Capital IQ anticipated $0.54 per share. Non-GAAP EPS of $0.56 for Q2 were 16% lower than the prior-year quarter's $0.67 per share. GAAP EPS of $0.61 for Q2 were 12% lower than the prior-year quarter's $0.69 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 24.3%, 100 basis points worse than the prior-year quarter. Operating margin was 12.5%, 250 basis points worse than the prior-year quarter. Net margin was 9.7%, 70 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.58 billion. On the bottom line, the average EPS estimate is $0.95.
Next year's average estimate for revenue is $13.48 billion. The average EPS estimate is $3.07.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,179 members out of 3,312 rating the stock outperform, and 133 members rating it underperform. Among 798 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 778 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 $72.68.
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