FIRST QUARTER HIGHLIGHTS
Note: All comparisons are versus the same period a year ago unless noted.
David C. Novak, chairman and CEO, says, “I’m very pleased to report better-than-expected first quarter EPS growth of 14 percent, before special items. The power of our global portfolio allowed us to overcome a challenging environment with system sales growth of 4 percent and operating profit growth of 7 percent, prior to foreign currency translation. I’m proud that our teams around the world are rising to the challenge by accelerating productivity initiatives and managing costs while we continue to drive and invest in our global growth strategies.
“Our China business drove strong results with system sales growth of 12 percent and profit growth of 21% prior to foreign currency translation. Importantly, we opened a record 98 new restaurants in mainland China and we are on track to open at least 475 new units for the full year. While sales in the U.S. were lower than anticipated, our U.S. business generated 7 percent profit growth with proactive reductions in our cost structure and margin improvement. U.S. same-store-sales declined 2 percent due to weakness at KFC and Pizza Hut. We are excited about the U.S. launch of KFC’s Kentucky Grilled Chicken, a great tasting product that will broaden the appeal of our brand. “Our goal continues to be to deliver EPS growth of 10 percent this year in spite of the weak economy. We forecast the second quarter will likely be Yum’s most challenging quarter and the low point of our year. However for the full year, much lower-than-expected commodity inflation should offset below target same-store-sales growth. Looking ahead, we expect to enter 2010 with even stronger brands and competitive positions everywhere we do business. Longer term, the fundamentals driving the growth of our global portfolio remain intact and give us the unique ability to generate unparalleled international new unit development, significant free cash flow, and an industry-leading return on invested capital.”
The five times weekly e-newsletter that keeps you up-to-date on the latest industry news and additions to this website.