October 11, 2012

Yum! Brands Q3 earnings up 23%

Yum! Brands, Inc.'s third quarter earnings rose 23% buoyed by strong sales and exceptional strength in China.

Net income in the period ended September 8 totalled US$471 million, equal to US$1.02 per share on the common stock, up from US$383 million, or US$0.82 per share, in the same period a year ago.

Total revenues rose 9% to US$3,569 million from US$3,274 million.

For the nine months ended September 8, net income was US$1,260 million, or US$2.72 per share, up 31% from US$963 million, or US$2.05 per share, in the same period a year ago. Net sales were US$9,480 million, up 11% from US$8,515 million.

Operating profit in the company's US division totalled US$162 million in the third quarter, up 13% from US$143 million in the same period a year ago. Total revenues fell 10% to US$787 million from US$873 million, but same-store sales increased 6%, including growth of 7% at Taco Bell, 6% at Pizza Hut and 4% at KFC.

Third-quarter operating profit within the China division rose 24% to US$374 million from US$301 million, while sales increased 24% to US$1,988 million from US$1,600 million. Same-store sales in China increased 6%. Yum! said it opened 192 new units in China during the third quarter and expects a record new-unit development of at least 750 units during fiscal 2013.

Operating profit in the Yum! Restaurants International division totalled US$173 million in the third quarter, up 7% from US$163 million in the same period a year ago. Total sales eased 1% to US$769 million from US$779 million.

As a result of the strong third quarter, Novak said Yum! Brands is raising its full-year EPS growth forecast to at least 13%, or at least US$3.24, excluding special items.