LOUISVILLE, Ky. – Yum Brands said Wednesday that its profit rose 8 per cent in the first quarter as the parent company of KFC, Pizza Hut and Taco Bell saw sales improve in the embattled China unit it plans to spin off.
The Louisville, Kentucky company said sales rose 6 per cent for established stores, a key industry metric, in China. The sales metric rose 12 per cent for KFC but declined 12 per cent for Pizza Hut, which has fewer restaurants.
The China unit has been hit by food scares and marketing missteps in recent years. In October, the company announced plans to spin off the business into a separate publicly traded company by the end of 2016.
The Taco Bell division, comprised primarily of U.S. stores, saw sales rise 1 per cent at established locations.
That figure rose 3 per cent for Pizza Hut globally (but excluding China) and 5 per cent in the U.S.
KFC was up 1 per cent globally, also excluding China, and up 1 per cent in the U.S.
For the quarter ended March 19, Yum earned $391 million, or 93 cents per share. Earnings, adjusted for non-recurring costs, came to 95 cents per share, topping the 83 cents analysts expected, according to Zacks Investment Research.
Revenue was $2.62 billion in the period, which fell short of the $2.66 billion analysts expected.
Yum shares added $2.97, or 3.6 per cent, to $85.50 in aftermarket trading. They have climbed 13 per cent since the beginning of the year, while the Standard & Poor’s 500 index has climbed roughly 3 per cent.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on YUM at http://www.zacks.com/ap/YUM
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