If Pizza Hut's sales on its busiest day of the year are any indication, the restaurant chain's recent underperformance may finally be coming to an end.In an email earlier this week, a Yum! Brands spokesman said by halftime on Super Bowl Sunday, Pizza Hut had already broken its single-day digital sales record at well over $10 million.
That's great news for Pizza Hut parentYum! Brands, which releases fourth-quarter results on Wednesday after the market close.Last quarter, Yum! Brands fell short of Wall Street's estimates on both revenue and earnings per share, held back in part by a 1% decline in same-store sales from Pizza Hut outside of China. This time, analysts are expecting Yum! Brands to post quarterly earnings and revenue of $0.66 per share and $3.97 billion, respectively -- the former of which would mean full-year 2014 earnings grew around 5.4% year over year to $3.14 per share, or roughly in-line with Yum!'s latest guidance for mid-single-digit EPS growth.
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Of course, Super Bowl sales won't be included in Wednesday's results as they fall under Yum!'s fiscal first quarter. But it could speak volumes that consumers are reacting well to Pizza Hut's recent ambitious brand revamp and newly overhauled menu. If that positive reaction extends beyond heightened single-day orders from pizza-crazed football fans, it should be reflected in Yum! Brands' full-year fiscal 2015 guidance. As of mid-December, Yum! Brands told investors to expect 2015 Pizza Hut Division operating profit growth of 10%.
At the same time, Pizza Hut's strength shouldn't come as a big surprise. Since last year's big game, Pizza Hut has since redesigned both its mobile app and website to capitalize on the trend and convenience of digital orders.It also heavily advertised its new menu offerings well ahead of the Super Bowl, even enlisting the help of Rex Ryan and Tony Romo to highlight its new crust flavors:
What's more, when I last spoke with Yum! SVP Jonathan Blum three months ago, I asked for clarification on one particular point in Yum!'s press release, which stated the chain had "major actions in place to drive same-store sales growth" going forward. Blum responded that Pizza Hut was already enjoying an "expected U.S. turnaround that's in its early stages," and said the company had plans in place for "aggressively marketing product innovation and value all around the globe."
And what better way to "aggressively market" its new wares than by capitalizing on the biggest pizza ordering event of the year?
Then again, Pizza Hut isn't the only challenge on Yum! Brands' plate right now. It also needs to juggle the performance of its Kentucky Fried Chicken and Taco Bell subsidiaries. And while both the core KFC and Taco Bell businesses enjoyed 3% growth in comps last quarter, helping them increase operating income by 14% and 16%, respectively, KFC is currently battling to rebound in China, where sales plunged on reports of meat handling issues with one of its suppliers.
Blum also pointed out that that now-former supplier was a small one, only providing two breakfast items to the chain. "But because we're a category leader there and twice the size of our nearest competitor," he said, "the publicity disproportionately focused on KFC." In any case, KFC stated in December that sales in China continue to recover, but at a slower pace than expected.
In the end, whether the performance of Pizza Hut and Taco Bell will prop up Yum!'s substantial KFC China segment remains to be seen. But I have a call scheduled this evening to speak again with Blum ahead of Yum! Brand's earnings conference call tomorrow morning. So check back here at Fool.com for the latest insight on how Yum! Brands fared.
The article Did Pizza Hut's Record Super Bowl Sunday Prove Yum! Brands Is Back on Track? originally appeared on Fool.com.
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