Yum! Brands Doubles Profit in 4Q, Expands in China

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Yum! Brands (NYSE:YUM) said late Wednesday that it more than doubled its fourth-quarter profit, helped primarily by its widening presence in China and rebounding U.S. sales.

The Louisville, Ky.-based company posted net income of $274 million, or 56 cents a share, compared with $126 million, or 45 cents a share, in the same quarter last year.

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Excluding special items, the company earned 63 cents a share, just ahead of average analyst estimates polled by Thomson Reuters of 60 cents.

Revenue for the quick service restaurant operator, including KFC, Pizza Hut, Taco Bell and Long John Silver’s, was $3.07 billion, up 5% from $2.91 billion a year ago, missing the Street’s view of $3.5 billion.

“I’m pleased to report that 2010 was perhaps our best year as a public company,” said Yum CEO David C. Novak. “I am equally pleased that in addition to strong financial performance, we improved our competitive position around the world.”

Worldwide sales were helped by 8% same-store growth in China, a market in which the company has been striving to expand. Fourth-quarter operating profit in the region surged 18% to $173 million, and the company added 414 new KFC restaurants in the region.

Yum’s U.S. division contributed to the results via a 5% growth in same store sales, and a 15% gain in operating profit to $173 million, driven by stronger demand at Pizza Hut and Taco Bell, partially offset by a 4% decline at KFC.

Looking ahead, the company said it expected to face commodity inflation amid a still recovering global economy, though it said its development in 2010 provides it with a head start in achieving profit growth in 2011.

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