WASHINGTON (dpa-AFX) - Restaurant operator Yum! Brands Inc. (YUM) is likely to dish out third-quarter figures after market close on Tuesday, October 6, with analysts polled by Thomson Reuters estimating earnings of $1.07 per share and revenues of $3.69 billion. Also, the company believes that it'll deliver a strong second half and full year EPS of at least 10%.
Yum! Brands in July reported second-quarter net income of $235 million or $0.53 per share, compared to $334 million or $0.73 per share for the year-ago quarter.
Excluding special items, adjusted earnings for the latest quarter were $0.69 per share versus $0.73 per share reported a year ago. On average, 21 analysts polled by Thomson Reuters expected the company to earn $0.63 per share for the second quarter. Analysts' estimates typically exclude special items.
Total revenue for the second quarter fell 3% to $3.11 billion from $3.20 billion in the same quarter of last year. Seventeen analysts had a consensus revenue estimate of $3.19 billion for the second quarter. This marked the fourth straight quarter of revenue decline.
Greg Creed, who took over as Yum! Brands CEO on January 1, said, 'EPS exceeded our original expectations in the second quarter and I'm pleased with the continued progress we are making in China, as well as the performance from our Taco Bell and KFC Divisions. Im confident we will deliver full-year EPS growth of at least 10%, driven by a strong second half in China and solid brand-building initiatives underway at each of our divisions.'
Click Here To Read Q2 In Detail
End of the second quarter, the company had 41,748 stores comprising 32,190 total franchise & license stores, 773 unconsolidated affiliates and 8,785 company owned stores.
China Division restaurant margin in the second quarter was an encouraging 14.6%, even though same-store sales declined 10%. Citing overall trends in sales and brand perceptions, the company expects substantial same-store sales and profit growth in the second half. Furthermore, the China Division remains on track to open at least 700 new restaurants this year, laying the groundwork for future growth.
Outside of China, Taco Bell is firing on all cylinders driven by industry-leading innovation and a solid breakfast platform. KFC continues to produce consistently positive results in both emerging and developed markets, including the company's U.S. business. At Pizza Hut, same store sales declined 4% in the quarter, but this marks an improvement from the company's first quarter performance and the brand is positioned for a strong second half.
Internationally, Yum! Brands is on pace to set a new record this year by opening 2,100 new restaurants, extending its lead in emerging markets. 'All of this should help us to achieve double-digit earnings growth this year, despite ongoing headwinds from foreign currency translation,' said Greg Creed.
The company further noted that its goal remains building three iconic, global brands people trust and champion, while delivering shareholder value through its three key drivers: same-store sales growth, new-unit development and high returns on invested capital. As it continues to strengthen its business around the world, the company is confident in producing consistent double-digit EPS growth over the long term.
Overall, the company has multiple opportunities for growth across each YUM! Division.
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