Yum! Brands Posts Upbeat Q2 Profit, But Sales Miss Views

Yum! Brands, Inc.YUM
reported better-than-expected earnings for its second quarter, but the company's sales missed analysts' estimates. The Louisville, Kentucky-based company reported quarterly earnings of $235 million, or $0.53 per share, versus $334 million, or $0.73 per share, in the year-ago period. Excluding one-time items, Yum earned $0.69 per share. Its sales slipped to $3.11 billion from $3.20 billion. However, analysts were expecting earnings of $0.63 per share on revenue of $3.19 billion. The average estimate among 41 Estimize users was for earnings of $0.65 per share and revenue of $3.19 billion. Worldwide system sales surged 3 percent. China division system sales shrank 4 percent for the quarter, while India division system sales came in even for the quarter. KFC division system sales gained 6 percent in the quarter, while Pizza Hut division system sales rose 1 percent. Taco Bell division system sales climbed 9 percent for the quarter. Yum! Brands same-store sales declined 10 percent in China, while same-store sales for KFC division rose 3 percent. Pizza Hut division same-store sales came in even for the quarter, while same-store sales for Taco Bell climbed 6 percent. Year-to-date through July 13, 2015, the company repurchased 4.4 million shares at an average price of $82. Greg Creed, CEO, said, "China Division restaurant margin in the second quarter was an encouraging 14.6%, even though same-store sales declined 10%, reinforcing our belief in significant profit leverage as sales recover. We expect substantial same-store sales and profit growth in the second half given overall trends in sales and brand perceptions. Furthermore, the China Division remains on track to open at least 700 new restaurants this year, laying the groundwork for future growth." Yum Brands shares fell 0.91 percent to $91.15 in the after-hours trading session.
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