WASHINGTON (dpa-AFX) - Restaurant operator Yum! Brands Inc. (YUM) said Wednesday after the markets closed that its second quarter profit fell 15% from last year, as its business in China was significantly impacted by adverse publicity surrounding Avian flu, as well as the residual effect of the December poultry supply incident.
However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but its quarterly revenue fell shy of analysts' forecast.
The parent company of Taco Bell, KFC and Pizza Hut also said it continues to expect full year 2013 adjusted earnings per share to decline in mid-single digit percentage as compared to full year 2012.
David Novak, Chairman and CEO of Yum! Brands, said, 'The good news is that China sales are recovering as expected. The extensive media surrounding Avian flu in China has subsided and same-store sales at KFC are clearly improving.'
Yum! Brands shares are currently gaining 0.25% in after hours trading after closing the day's regular trading session at $72.36, down 31 cents. The shares trade in a 52-week range of $59.68 to $74.75.
Total revenue for the company's all-important China division fell 7% to $1.45 billion in the second quarter, while same-store sales declined 20%, including a 26% decline at KFC and 7% growth at Pizza Hut. The division's operating profit dropped 63% from last year to $68 million.
The company also said June same-store sales declined an estimated 10% for the China Division, improving from a 19% decline in May.
The company is highly optimistic about its business in China, saying it remain on track to open at least 700 new units this year for the China Division.
Second quarter revenue for Yum! Restaurants International division fell 7% to $713 million, while division's same-store sales for the quarter grew 1%. The division's operating profit rose 8% to $163 million.
Total revenue for the company's U.S. division fell 13% to $709 million in the second quarter, while same-store sales increased 1%, driven by growth of 2% at Taco Bell and 3% at KFC, partially offset by decline of 2% at Pizza Hut.
For the second quarter ended June 15, 2013, the Louisville, Kentucky-based company reported net income of $281 million or $0.61 per share, compared to $331 million or $0.69 per share for the year-ago quarter.
Excluding special items, adjusted earnings for the second quarter were $0.56 per share, compared to $0.67 per share in the prior year quarter.
On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.54 per share for the second quarter. Analysts' estimates typically exclude special items.
Total revenue for the second quarter fell 8% to $2.90 billion from $3.17 billion in the same quarter last year. Eighteen analysts had a consensus revenue estimate of $2.93 billion for the second quarter.
Worldwide restaurant margin declined 2.7 percentage points to 12.5% in the second quarter, including a decline of 5.0 percentage points in China. Restaurant margin increased 0.8 percentage points at YRI and in the U.S.
Year-to-date through July 9, the company repurchased 5.7 million shares for $390 million.
Copyright RTT News/dpa-AFX
© 2013 AFX News
