Yum Brand's Third Quarter Results
Yum Brands on Tuesday reported earnings of $1.0/share on revenues of $3.46. This was below Wall Street analyst estimates of $1.6/share in earnings on revenues of $3.68/share.
I'm a little confused on why shares in Yum Brand tanked by over 18% for only missing analyst estimated. Since the company report increases in profits and margins from its restaurants. China may be experiencing economic woes, which prevented Yum's China Division from reporting a 8% increase from the previous year. This increase was the result of a 7% increase in units and 2% increase in same store sales.
The company's KFC division saw a 6% increase in sales driven by a 3% increase unit growth and same store sales. Yum's Pizza Hut division saw a 2% increase in system sells and units. It's Pizza Hut division saw a 1% same store sales, compared to the company's Taco Bell division. Yum's Taco Bell Division saw a 7% in system sales on 3% unit growth. The company's India division on the other hand saw a decline of 9% in system sales on a 10% increase in unit sales. Also Yum's India division saw same store sales decline by 18% during the third quarter.
What happening in China as forced Yum to cut its fourth quarter and full year guidance. In the short-term, shares in Yum Brand will probably fall more as the company struggles with whats happening in China. Yum Brands China operations will continue to be a drag on earnings and its stock price.
Published on Oct 10, 2015By Cody Eustice
Posted in ...Market Commentary