Yum! Brands’ new stores drive strong full-year results

Yum! Brands has posted strong results for the quarter and fiscal year ending 31 December 2018, thanks to thousands of new store openings around the world and same-store sales increases across its global restaurant brands, KFC, Pizza Hut and Taco Bell.

The US-based company reported a 24 per cent increase in full-year GAAP earnings per share (EPS) to US$4.69 in FY18, up from US$3.77 in FY17.

GAAP EPS fell 17 per cent in the fourth quarter to US$1.04 due to the US$171 million pre-tax investment expense Yum! Brands recorded in the quarter to reflect the change in fair value of its investment in US food delivery company, Grubhub. The investment had a negative impact on EPS in the quarter, but an overall positive impact on EPS for the year.

Worldwide system sales excluding foreign currency translation grew 6 per cent in Q4, with Taco Bell at 9 per cent, KFC at 7 per cent and Pizza Hut at 2 per cent. Sales grew 5 per cent in FY18, with KFC at 6 per cent, Taco Bell at 6 per cent and Pizza Hut at 1 per cent.

KFC

KFC’s worldwide system sales reached US$7.05 billion in Q4, up 7 per cent on the previous corresponding period, excluding foreign currency translation. Sales for the year totaled US$26.23 billion, up 6 per cent on FY17, excluding foreign currency translation.

System sales grew 6 per cent in the Australian market in Q4, excluding foreign currency translation.

Australia accounts for 7 per cent of the division’s total system sales, behind China at 27 per cent, the US at 17 per cent and the broader Asia and Russia and Eastern European regions.

Same-store sales in KFC’s international markets increased 8 per cent in Q4, excluding foreign currency translation. More than 1500 new international restaurants were opened in 87 countries in FY18.

Pizza Hut

Pizza Hut’s worldwide system sales reached US$3.34 billion in Q4, up 2 per cent on the previous corresponding period, excluding foreign currency translation. Sales for the year totaled US$12.21 billion, up 1 per cent on FY17, excluding foreign currency translation.

Same-store sales in Pizza Hut’s international markets increased 3 per cent in Q4, excluding foreign currency translation. More than 860 new international restaurants were opened in 76 countries in FY18.

Taco Bell

Taco Bell’s worldwide system sales reached US$3.35 billion in Q4, up 9 per cent on the previous corresponding period, excluding foreign currency translation. Sales for the year totaled US$10.79 billion, up 6 per cent on FY17, excluding foreign currency translation.

Yum! Brands opened 1757 net new units over the year, and added 1282 Telepizza units – a chain based in the EU and UK – for 7 per cent net unit growth. It refranchised 660 restaurants, including 364 KFC, 97 Pizza Hut and 199 Taco Bell units, for pre-tax proceeds of $825 million, recording net refranchising gains of US$540 million in special items.

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