Yum! Brands Q2 Profit Down, System Sales Rise; Backs FY Outlook

(RTTNews) - Yum! Brands Inc. (YUM), the owner of KFC, Pizza Hut and Taco Bell, reported Thursday lower profit in its second quarter with weak revenues. System sales and same store sales, however, increased. Further, the company said it is maintaining full-year core operating profit growth guidance.

Greg Creed, CEO, said, "I'm pleased Yum! Brands' intensified focus on our four distinct growth drivers helped deliver another successful quarter. ... We are maintaining our full-year 2017 guidance and are on pace with our multi-year transformation strategy designed to further unlock shareholder value."

For the second quarter, net income fell 39 percent to $206 million from $336 million last year. On a continuing operations basis, net income declined 23 percent.

Earnings per share were $0.58, compared to last year's earnings per share from continuing operations of $0.64.

Second-quarter adjusted earnings per share were $0.68, compared to $0.56 a year ago.

On average, 22 analysts polled by Thomson Reuters expected earnings of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues in the quarter declined 4 percent to $1.45 billion from $1.51 billion last year.

Company sales dropped 10 percent from last year to $909 million, while franchise and license fees and income grew 7 percent to $539 million.

In the quarter, total KFC segment revenues dropped 1 percent to $770 million and total Pizza Hut revenues fell 17 percent to $222 million. Total Taco Bell revenues declined 2 percent to $456 million.

Worldwide system sales grew 6 percent, with KFC and Taco Bell up at 7 percent and Pizza Hut at 2 percent.

Same store sales increased 2 percent, with KFC up 3 percent and Taco Bell up 4 percent, while Pizza Hut dropped 1 percent

In pre-market activity, Yum! Brands shares were trading at $76.40, down 0.29 percent.