Article

Yum! comps finally all up in Q3 2010

October 7, 2010

Pizza Hut parent company Yum! Brands has reported same store gains in its U.S., China and International divisions, driven partially by Pizza Hut's 8 percent growth for the third quarter of 2010, ended September 4. The statement is a far cry from the brand's sluggish sales the majority of 2009; it marks the first time all three divisions have had same-store sales increases since Q4 2008. Pizza Hut sales finally started to rebound in Q1 2010 through $10 pizza deals and new marketing pieces with The Martin Agency.

Same-store sales grew 6 percent in China, and 1 percent for both the International and U.S. divisions. In the U.S., same-store sales increased 1 percent driven by a growth of 8 percent at Pizza Hut and 3 percent at Taco Bell, offset by a decline of 8 percent at KFC.

China continues to be a huge growth market for Yum. System sales for this division grew 18 percent, driven by new unit development. Its last earnings statement had predicted trouble from rising labor costs in the area, but restaurant margins combated inflation in that area. Investor relations officials did not respond to questions regarding what future strategies would be employed to derail the predicted continual growth of that cost.

Nor did the investors' team directly answer questions about if monies granted from a U.S. Division refranchising effort started in 2007 were reinvested in the system. Year-to-date, the company has sold 98 of its previously company-owned restaurants.

Income for the entire system was at $357 million, up 7 percent from the corresponding $334 million mark of Q3 2009. Year-to-date, income was $884 million, 3 percent higher than the $855 mark of last year.

Total revenue for the quarter was $2.9 billion, up 3 percent from $2.8 billion in Q3 2009. Year-to-date, revenue was 4 percent higher than the corresponding number from last year: $7.8 billion, up from $7.4 billion.