LOUISVILLE Ky. – It looks like Yum! Brands’ latest changes to the company could produce better numbers than expected for the last quarter of 2015. The company that owns the KFC, Pizza Hut and Taco Bell chains reported an 11 percent increase in net income, or 68 cents per share, on the fourth-quarter EPS excluding special items.
There was also good news for the worldwide system sales for the year as they jumped 6 percent in the quarter, and its worldwide restaurant margin increased 3.4 percentage points to 13.6 percent.
|Greg Creed, Yum! Brands CEO|
“I’m pleased with the positive sales momentum we generated across the majority of Yum! in the fourth quarter," said Yum! CEO Greg Creed.
Net income for quarter was $275 million, or 63 cents per share, compared to a loss of $86 million, or 20 cents per share, a year ago.
For the fourth quarter, the KFC Division system sales increased 6 percent, driven by 3 percent growth. Revenues for the quarter totaled $918 million, down 9 percent from the prior year. Operating profit declined 7 percent to $206 million from $221 million.
Pizza Hut’s system sales increased 2 percent driven by 1 percent unit growth and 1 percent same-store sales growth. Revenues for the quarter totaled $348 million, down 1 percent from the prior year. Operating profit increased 3 percent from $80 million to $81 million.
Taco Bell reported a system sales increase of 7 percent driven by 3 percent unit growth and 4 percent same-store sales growth. Revenues for the quarter totaled $608 million, up 3 percent from the prior year. Operating profit declined 7 percent to $152 million from $163 million.
In the quarter, Yum said its new global restaurants totaled 1,160 — with 384 in China, 374 at KFC, 270 at Pizza Hut, 109 at Taco Bell and 23 in India.
Total revenues were $3.95 billion compared with nearly $4 billion in revenue the year before.
This comes at a crucial time as Yum! looks for great returns after it announced in October that it will spin off its China division into a separate, publicly traded company by the end of 2016.Yum! China, set to be based in Shanghai, will have exclusive rights to KFC, Pizza Hut and Taco Bell.
The KFC same-store sales in China continued to increase by 6 percent for the quarter but declined 4 percent for the year. Pizza Hut in China also struggled with an 8 percent decline for the quarter and 5 percent for the year.
Still Creed sees a positive outlook for the emerging markets and the company.
"2016 will be a transformational year for Yum! as we are on track to complete the spin-off of our China Division, ultimately creating two powerful, independent, focused growth companies," Creed said.