WASHINGTON (dpa-AFX) - Restaurant operator Yum! Brands Inc. (YUM) said Tuesday after the markets closed that its first quarter profit fell 9% from last year, mainly due to weak performance of its China division.
However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but its quarterly revenue fell shy of analysts' forecast.
At the same time, the company maintained its full year guidance of at lest 10% earnings per share growth in 2015.
Greg Creed, who took over as Yum! Brands CEO on January 1, said 'While EPS declined in the first quarter, I'm pleased with the strong performance from our KFC and Taco Bell Divisions, as well as the continued progress we are making in China. I'm confident we will deliver full-year EPS growth of at least 10%, with a strong second half in China and solid brand-building initiatives underway at each of our divisions.'
Yum! Brands shares are currently gaining 4.51% in after hours trading after closing the day's regular trading session at $80.85, down 24 cents. The shares trade in a 52-week range of $65.81 to $83.58.
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 fell 9% to $1.26 billion in the first quarter, while same-store sales declined 12%, including declines of 14% at KFC and 6% at Pizza Hut Casual Dining. The division's operating profit dropped 33% from last year to $190 million.
China division's first quarter same-store sales were significantly impacted by adverse publicity in July 2014 surrounding improper food handling practices by a former supplier. The division opened 171 new units during the quarter.
First quarter revenue for the company's KFC division fell 3% to $642 million, while the division's operating profit increased 4% to $169 million.
Pizza Hut division's first quarter revenue grew 1% to $271 million, while the division's operating profit fell 4% to $81 million.
First quarter revenue from the company's Taco Bell division grew 10% to $431 million, while the division's operating profit jumped 37% to $115 million.
For the first quarter ended March 21, 2015, the Louisville, Kentucky-based company reported net income of $362 million or $0.81 per share, compared to $399 million or $0.87 per share for the year-ago quarter.
Excluding items, adjusted earnings for the latest quarter were $0.80 per share.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $0.72 per share for the first quarter. Analysts' estimates typically exclude special items.
Total revenue for the first quarter fell 4% to $2.62 billion from $2.72 billion in the same quarter last year. Fifteen analysts had a consensus revenue estimate of $2.64 billion for the first quarter.
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