News

Yum sails through Q2 with sparkling performance that beats predictions

August 1, 2019

Multi-brand QSR powerhouse, Yum Brands, reported equally powerful Q2 system sales growth of 10% with same-store sales and GAAP operating profit both up 5% and core operating profit growth of 18% for the period that ended June 30, a news release said. 

Other key Q2 highlights include:  

• 10% growth in worldwide system sales excluding foreign currency translation.
• 5% growth in same-store sales.
• 7% increase in net-new units.
• 5% drop in quarterly GAAP EPS to $0.92.
• 15% increase in Q2 EPS, excluding special items, to $0.93.

"Second-quarter results maintained early year momentum and helped us to exceed our already high expectations for a strong first half of 2019," Yum Brands CEO Greg Creed said in the released results. "I'm especially pleased to report that we delivered 10% system sales growth in the quarter, supported by broad based strength at KFC International and Taco Bell.

Our commitment to being a more focused, more franchised, and more efficient growth company positions us well for long-term success."

Worldwide system sales excluding foreign currency translation grew 10%, with KFC, Pizza Hut and Taco Bell each at 10%. The company opened 312 net units in the quarter. On a year-over-year basis, which accounts for the company's alliance with Telepizza in the fourth-quarter 2018, net new unit growth was 7%.

The company said it reflected the change in fair value of its investment in Grubhub by recording pre-tax investment income of $24 million in the second quarter of 2019 and $25 million in the second quarter of 2018. That resulted in $0.06 in EPS during each respective quarter.

KFC Division opened 331 gross new restaurants in 54 countries and its operating margin increased 8.6% driven by refranchising, same-store sales growth and net new unit growth. Pizza Hut Division opened 221 gross new restaurants in 42 countries and operating margin increased 4.1% driven by refranchising, same-store sales growth and lower advertising spend. And Taco Bell Division opened 55 gross new restaurants in 12 countries, with operating margin growing 2.4% driven by same-store sales growth and refranchising, partially offset by higher restaurant level costs.