China, International Propel Yum! (YUM) to Q2 Beat, Strong FY11 Growth Expected
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Price: $70.18 -0.4%
EPS Growth %: -7.9%
Financial Fact:
Other (income) expense: -8M
Today's EPS Names:
CSS, STV, GIGM, More
EPS Growth %: -7.9%
Financial Fact:
Other (income) expense: -8M
Today's EPS Names:
CSS, STV, GIGM, More
Trade YUM Now!
Yum! (NYSE: YUM) shares are trading higher after-hours Wednesday following it's second-quarter earnings report.
Revenue increased 9 percent from $2.574 billion to $2.816 billion. Comps in the U.S. fell 4 percent, while China comps grew 18 percent and Yum! Restaurants International (YRI) saw a 2 percent increase.
Net income jumped 10.5 percent from $286 million to $316 million, or 65 cents per diluted share. Adjusting for special items, net income was a more robust 66 cents per share, topping the Street's estimate calling for 61 cents per share.
"I’m pleased to report we are raising our full year EPS growth forecast to at least 12% based on the continued strength of our international businesses," commented Yum! CEO David Novak. "Our China business continues to be the leading growth story in the restaurant industry, as our category-leading brands are performing stronger than ever...Our outstanding international results were offset by a 28% decline in U.S. profits, driven by higher commodity costs and a 4% decline in same-store sales."
U.S. Taco Bell comps saw the most pressure, falling about 5 percent in the quarter.
On it's outlook, the 12 percent growth in fiscal 2011 translates to earnings of about $2.83 per share, slightly shy of the $2.84 sought by the Street.
Notable in it's China division, restaurant margin decreased 0.5 percentage points, driven primarily by higher wage rates and commodity inflation. We now estimate commodity inflation of approximately 9% for the full year.
Yum! shares are up nearly 3 percent following the report.
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Revenue increased 9 percent from $2.574 billion to $2.816 billion. Comps in the U.S. fell 4 percent, while China comps grew 18 percent and Yum! Restaurants International (YRI) saw a 2 percent increase.
Net income jumped 10.5 percent from $286 million to $316 million, or 65 cents per diluted share. Adjusting for special items, net income was a more robust 66 cents per share, topping the Street's estimate calling for 61 cents per share.
"I’m pleased to report we are raising our full year EPS growth forecast to at least 12% based on the continued strength of our international businesses," commented Yum! CEO David Novak. "Our China business continues to be the leading growth story in the restaurant industry, as our category-leading brands are performing stronger than ever...Our outstanding international results were offset by a 28% decline in U.S. profits, driven by higher commodity costs and a 4% decline in same-store sales."
U.S. Taco Bell comps saw the most pressure, falling about 5 percent in the quarter.
On it's outlook, the 12 percent growth in fiscal 2011 translates to earnings of about $2.83 per share, slightly shy of the $2.84 sought by the Street.
Notable in it's China division, restaurant margin decreased 0.5 percentage points, driven primarily by higher wage rates and commodity inflation. We now estimate commodity inflation of approximately 9% for the full year.
Yum! shares are up nearly 3 percent following the report.
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