LOUISVILLE, Ky. – Yum Brands on Wednesday reported mixed quarterly results for its troubled China unit, which the company is spinning off.
The Louisville, Kentucky company said sales rose 6 per cent at established KFC restaurants in China, while its Pizza Hut sales fell 8 per cent. Jonathan Blum, Yum’s chief public affairs officer, attributed the drop at the pizza chain to the country’s economic slowdown.
“The marketplace has affected casual dining sales in general, which has had an impact on Pizza Hut,” Blum said. As such, he said the company planned to sharpen its focus on value to boost results.
Yum has been trying to fix its business in China ever since sales there were slammed by food scares. Executives have also conceded they made marketing missteps. In October, Yum announced plans to spin off the business into a separate, publicly traded company.
Back at home, Yum said KFC and Pizza Hut both showed improved sales figures, with the two chains undergoing a turnaround push to reverse slumping sales. KFC’s sales were up 3 per cent at established locations, and Pizza Hut’s were up 2 per cent.
Yum’s strongest chain in the U.S., Taco Bell, delivered a 4 per cent sales increase at established locations.
For the quarter ended Dec. 26, Yum Brands Inc. reported net income of $275 million, after reporting a loss in the same period a year earlier. That came to 63 cents per share. Adjusted for one-time costs, it earned 68 cents per share, 2 cents more than Wall Street expected, according to Zacks Investment Research.
Total revenue was $3.95 billion in the period, which fell short of the $4 billion analysts expected.
Yum shares have decreased nearly 1 per cent since the beginning of the year, while the Standard & Poor’s 500 index has dropped slightly more than 6 per cent. In the final minutes of trading on Wednesday, shares hit $72.45, a decrease of almost 2 per cent in the last 12 months. In after-hours trading, the stock lost about $1.10 to $71.35.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on YUM at http://www.zacks.com/ap/YUM
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