WASHINGTON (dpa-AFX) - Restaurant operator Yum! Brands Inc. (YUM), Wednesday reported an increase in profit for the third quarter despite lower revenues.
Louisville, Kentucky-based Yum! Brands reported third-quarter profit of $622 million or $1.56 per share, up from $421 million or $0.95 per share last year. Adjusted earnings rose to $1.09 per share from $1.00 per share last year.
Yum Brands, the parent company of Taco Bell, KFC and Pizza Hut, said revenues dropped 3 percent to $3.32 billion from $3.43 billion last year.
Yum Brands, which is spinning off its China business, said worldwide system sales grew 4 percent, with same-store sales up 1 percent and new unit sales up 3 percent.
Yum China, which generates more operating profit for the company than any other division, reported 1 percent decline in same-store sales. China system sales increased 3 percent. The company said it is on track to finalize China separation with Yum China Holdings, Inc. expected to begin trading on November 1, 2016 on the NYSE under the ticker symbol 'YUMC.'
Commenting on the results, CEO Greg Creed said, 'Sales were off to a good start in the first six weeks of the quarter in the China Division. However, anticipated tougher laps in the second half of the third quarter were compounded by an international court ruling on claims regarding the South China Sea, which triggered a series of regional protests and negative sentiment against a few international companies with well-known Western brands.'
KFC division same-store sales increased 4 percent, with U.S. same-store sales growing 6 percent. Taco Bell division same-store sales increased 3 percent.
The company said it opened 475 new restaurants worldwide, with 78 percent of international development occurred in emerging markets.
YUM closed Wednesday's trading at $88.62, down $1.66 or 1.84%, on the NYSE. The stock further dropped $1.65 or 1.86% in the after-hours trading.
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