Pizza Hut parent company Yum! Brands Inc., in advance of its annual investor update meeting, reaffirmed its full year 2009 EPS growth forecast of 12 percent, excluding special items. Yum! also announced that it expects to deliver at least 10 percent EPS growth in 2010, excluding special items, which would mark the ninth straight year of meeting or exceeding this annual EPS growth target.
 
David C. Novak, chairman and CEO, attributed the growth to international expasion and a few other measures. 
 
"This performance has been driven by our industry leading international new unit development, favorable commodity costs, productivity gains across our businesses and a lower effective tax rate," Novak said. "We are also pleased that we were able to deliver an increased dividend to our shareholders as well as improve on our industry leading Return on Invested Capital (ROIC).
 
"Our biggest challenge continues to be driving same-store-sales growth in the difficult consumer environment. All indications are that 2010 will be another challenging year, and we have built our plans accordingly. We plan to deliver at least 10 percent EPS growth in 2010 benefiting from international new unit development, disciplined cost management, modest same-store sales growth and favorable foreign currency translation. We believe our track record of delivering double-digit EPS growth is driving long-term value for our shareholders."
 
Other 2010 targets included:
  • Continued substantial international new unit development of 1,400, including both Yum! Restaurants International (YRI) and China.
  • Target profit growth, excluding foreign currency translation, of 15 percent in mainland China, 10 percent in YRI and 5 percent in the U.S.
  • Currently estimating foreign currency translation benefit of $25-$50 million.
The company also released bullet points of its 2009 review:
  • Full year 2009 EPS growth of 12 percent, excluding special items, led by full year new unit development of 1,400-plus new units in China and YRI combined.
  • Full year 2009 estimated system sales growth, excluding foreign currency translation, of 9 percent in mainland China and 5 percent in YRI, and same-store sales decline of 4 percent in the United States. Fourth quarter estimated same-store sales performance of negative 3 percent in mainland China, negative 1 percent in YRI and  negative 8 percent in the United States.
  • Full year 2009 negative foreign currency translation impact of about $45 million.
The company will present a business update and take questions on its strategies and global expansion outlook on Dec. 9, from approximately 8:45 a.m. to 12:30 p.m. Eastern time at the St. Regis Hotel in New York City. Following the event beginning at 12:45 p.m., the company will have a detailed modeling session and will provide additional full-year 2010 guidance.

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