WASHINGTON (dpa-AFX) - Restaurant operator Yum! Brands Inc. (YUM) said Tuesday after the markets closed that its first quarter profit rose 18% from last year, helped by strong performance of its China division.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations, but its quarterly revenue fell short of analysts' forecast.
The parent company of Taco Bell, KFC and Pizza Hut reaffirmed its full year guidance of at least 20% earnings per share growth in 2014.
David Novak, Yum! Brands Chairman and CEO said, 'Yum! Brands is clearly on its way to a strong bounce-back year delivering first-quarter EPS growth of 24%. Operating profit grew 80% in China, prior to foreign currency translation, driven by strong sales and margin growth. Looking ahead, we have significant building blocks in place in China and each of our divisions to drive sales and profit growth this year and beyond.'
Yum! Brands shares are currently gaining 3.41% in after hours trading after closing the day's regular trading session at $77.48, up $1.47 or 1.93%. The shares trade in a 52-week range of $63.16 to $78.68.
Effective January 1, 2014, the company combined its Yum! Restaurants International and U.S. divisions into three global brand divisions: KFC, Pizza Hut and Taco Bell. China and India remains separate divisions given their strategic importance and enormous growth potential.
Total revenue for the company's all-important China division rose 20% to $1.38 billion in the first quarter, while same-store sales grew 9%, including growth of 11% at KFC and 8% at Pizza Hut Casual Dining. The division's operating profit jumped 85% from last year to $285 million.
The China Division opened 123 new units in the first quarter.
First quarter revenue for the company's KFC division grew 1% to $664 million, while the division's operating profit fell 2% to $163 million.
Pizza Hut division's revenue remained flat with the first quarter of last year at $267 million, while the division's operating profit fell 15% to $84 million.
First quarter revenue from the company's Taco Bell division fell 11% to $391 million, while the division's operating profit dropped 16% to $84 million.
For the first quarter ended March 22, 2014, the Louisville, Kentucky-based company reported net income of $399 million or $0.87 per share, compared to $337 million or $0.72 per share for the year-ago quarter.
On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.85 per share for the first quarter. Analysts' estimates typically exclude special items.
Total revenue for the first quarter rose 7% to $2.72 billion from $2.54 billion in the same quarter last year. Eighteen analysts had a consensus revenue estimate of $2.80 billion for the first quarter.
Worldwide restaurant margin increased 3.3 percentage points to 19.2% in the first quarter. China division restaurant margin increased 6.8 percentage points to 23.4%.
Year-to-date through April 21, Yum! Brands repurchased 2.3 million shares for $170 million.
Earlier Tuesday, fast food giant McDonald's Corp. (MCD) reported a 5% drop in first quarter profit that also missed analysts' estimate.
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