Yum! Brands (YUM) Tops Q4 EPS by 9c
Yum! Brands (NYSE: YUM) reported Q4 EPS of $1.04, $0.09 better than the analyst estimate of $0.95. Revenue for the quarter came in at $1.56 billion versus the consensus estimate of $1.59 billion.
| Worldwide system sales excluding foreign currency translation grew 6%, with Taco Bell at 9%, KFC at 7% and Pizza Hut at 2%. |
| We opened 865 net new units and added 1,282 Telepizza units for 7% net unit growth. |
| We refranchised 331 restaurants, including 227 KFC and 104 Taco Bell units, for pre-tax proceeds of $380 million. We recorded net refranchising gains of $255 million in Special Items. As of quarter end, our global franchise ownership mix increased to 98%. |
| We repurchased 7.8 million shares totaling $696 million at an average price of $90. |
| We reflected the change in fair value of our investment in Grubhub by recording $171 million of pre-tax investment expense, resulting in a negative ($0.41) impact to EPS on the quarter. |
| Foreign currency translation unfavorably impacted divisional operating profit by $14 million. |
Greg Creed, CEO, said, “I am very proud of what we have been able to accomplish in just two short years since we announced the transformation of Yum!. In 2018, our diverse portfolio of iconic brands generated over $49 billion in system sales and ended the year with over 48,000 restaurants. Focus on our four growth drivers, increased collaboration and a new mindset are fueling strong results. During 2018, system sales grew 5% with same store sales growth of 2%, and net unit growth of 4%, excluding the impact of Telepizza. Combined across our brands and led by over 2,000 world-class franchisees, we opened a record 8 gross new restaurants per day across the globe in 2018. As we move into 2019, we will continue to pursue even more growth, leverage our unprecedented scale, and maximize value for all Yum! stakeholders.”
David Gibbs, President, COO and CFO, continued, “Fourth-quarter results were a strong finish to a solid year, and serve as a healthy foundation for our 2019 guidance. I am also pleased that we made significant progress on our transformation commitments in 2018, having achieved our goal of becoming at least 98% franchised. Our commitment to being more focused, more franchised and more efficient is strengthening our enviable business model. Yum! is well positioned to leverage our massive scale and expand our capabilities in order to improve franchise unit economics and accelerate growth.”
For earnings history and earnings-related data on Yum! Brands (YUM) click here.