Yum! Brands Exceeds Consensus Analyst Estimates

Yum! Brands YUM reported its fourth quarter results on Monday after the closing bell. The company reported an EPS of $0.86, which beat the consensus estimate of $0.80. Revenue of $4.17 billion exceeded the consensus estimate of $4.08 billion.

The food company also reported same-store sales, which declined by four percent in China. KFC same-store sales fell four percent in the quarter and 15 percent in fiscal 2013.
KFC's declining sales were due to the company failing to address concerns over antibiotics used in the chicken itself.

Fortunately, same-store sales were flat in the United States and grew one percent. Yum! Brands management said that it is confident to deliver at least 20 percent EPS growth in 2014, which reiterates its record of double-digit EPS growth.

John Glass, an analyst at Morgan Stanley, believes that Yum! Brands reported a strong quarterly result, possessing a contrarian view. This was despite the company worrying or warning a lot of investors over its Chinese regulatory and food safety issues.

Jason West, analyst at Deutsche Bank, believes that Yum! Brands delivered a positive result when the general sentiment was unfavorable going in to earnings. Karen Holthouse, analyst at Credit Suisse, believes that Yum! Brands could deliver a strong performance in China, but it would be contingent on the severity of the ongoing bird flu concerns.

Shares were down about two percent on Wednesday.