Cars wait in a line at a KFC (Kentucky Fried Chicken) drive-thru in Bloomsburg.
Paul Weaver | LightRocket | Getty Images
Yum Brands on Wednesday reported quarterly earnings that fell short of analysts’ expectations, despite a China sales rebound for KFC and Pizza Hut.
Yum joins the growing list of companies that includes Procter & Gamble and Starbucks that have reported recovering sales in China.
Shares of the company dropped more than 2% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.06 adjusted vs. $1.13 expected
- Revenue: $1.65 billion vs. $1.62 billion expected
Yum reported first-quarter net income of $300 million, or $1.05 per share, down from $399 million, or $1.36 per share, a year earlier. The company said its earning per share decreased by 7 cents per share due to decreases in the value of unnamed investments, and took an 8 cent per share hit because of foreign currency.
Excluding items, the restaurant company earned $1.06 per share.
Net sales rose 6% to $1.65 billion. Its same-store sales increased 8% in the quarter as its three largest chains outperformed expectations.
KFC’s same-store sales rose 9%, thanks to its international markets. In China, KFC’s largest market, system sales climbed 17%, helping lift the chain’s international same-store sales growth 11%.
Similarly, Pizza Hut reported that China’s system sales soared 24% in the quarter. The country is Pizza Hut’s second-largest market, trailing on the U.S. The pizza chain also performed well stateside, reporting domestic same-store sales growth of 8%.
Taco Bell reported same-store sales growth of 8% for the quarter.
In mid-April, Yum completed its exit from Russia through the sale of those KFC restaurants to Smart Service, an existing Russian franchisee.
