Strong showing for Yum despite Taco Bell publicity

May 1, 2007
LOUISVILLE, Ky. — Yum Brands Inc., the parent company of the Taco Bell, Pizza Hut, KFC, Long John Silver's and A&W brands, saw system-wide revenues increase 7 percent to $1.9 billion for the first quarter ended March 24.
The increase came despite poor results from the company's Taco Bell subsidiary, which saw an 11 percent drop in same-store sales for the quarter, largely as the result of a December 2006 E. coli outbreak associated with several restaurants in the northeastern United States, as well as a rat infestation incident in New York which drew national media attention.
U.S. system-wide same-store sales, including franchisees, fell 3 percent for the quarter. Same-store sales at company-owned stores fell 6 percent. Additionally, same-store sales for mainland China increased 9 percent, while Yum's international division generated 9 percent same-store sales growth.
Revenues for the company's China division increased 23 percent to $342 million.
Yum's net income increased to $194 million, up 14 percent from net income of $170 million for the 2006 first quarter. Based on the first-quarter results, Yum is projecting full-year earnings per share growth of at least 11 percent, or $3.23 per share, up from prior EPS guidance of at least 10 percent or $3.21.

Topics: Financial Management , Food & Beverage , Franchising & Growth , Operations Management , Pizza Hut

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