STRATEGIC PARTNERS
July 13, 2010
Pizza Hut parent Yum! Brands had a mixed earnings report for the second quarter ended June 12, 2010. While Pizza Hut in the U.S. helped slumping comp sales, the mainland China Division continued its contribution to the brand, boasting a 33 percent growth rate.
“A key driver of our overall growth continues to be new unit development in China and Yum! Restaurants International,” said CEO David Novak. “We continue to expect to open about 1,400 international units this year and remain the industry’s leading international new unit developer.”
Comps were relatively flat for the Yum! U.S. division from last year, though Pizza Hut helped in this arena with an 8 percent increase. The increase offset a 7 percent comps decrease at KFC at the end of the 2010 second quarter. In a conference call, Novak said the company is confident that Pizza Hut's sales will remain strong as the brand continues to focus on value. The brand is seeing most of its sales from the $10 any-size pizza positioning but also is experiencing success with TuscanyTuesday's focus on pasta and is experimenting with a WingsWednesdayspecial.
For the international division including Asia, Europe, Middle East, Latin America, Australia, same-store-sales grew 1 percent for the second quarter. The China Division, which includes mainland China, enjoyed a 4 percent same-store sales growth figure.
Income dried up a bit for the brand in Q2 2010. The quarter ended June 12 saw $286 million in income, a 6 percent decrease from the Q2 2009 figure of $303 million. The brand’s year-to-date income figure is up about one percent, at $527 million compared to last years’ $521 million.
Revenues for Yum! Brands’ total earnings were up 4 percent in Q2 2010 at $2.57 billion, from $2.48 billion in 2009. Year-to-date, the brand has enjoyed a 5 percent increase in revenues, to $4.9 billion from $4.69 billion in Q2 2009.
