Yum! Brands' Stock Soars on Earnings, Despite Slowing Sales in China
Yum! Brands delivered better-than-expected fourth-quarter earnings after the bell on Monday. For the period ended in December, Yum! Brands reported a profit of $0.86 per share, excluding certain items, up 4% from the same period a year ago. That was significantly better than Wall Street's forecasts for earnings per share of $0.80 in the quarter. Meanwhile, fourth-quarter revenue came in at $4.18 billion, which compares to analyst estimates for quarterly revenue of $4.26 billion in the period .
Nevertheless, the Chinese market continued to be a sour point for the chain, as Yum!'s same-store sales declined 4% in the region. The fast-food chain, whose brands include Pizza Hut, KFC, and Taco Bell, suffered from a challenging retail environment abroad in 2013. In fact, analysts had low expectations for Yum!'s December quarter because of ongoing worries over the bird flu in China, which tarnished the company's brand image in the Asia-Pacific market last year.
Coming off a challenging year, Yum! Brands CEO David Novak expects the company to make meaningful progress in the year ahead. "With the decisive actions we've taken to strengthen our company across the board, we are well positioned to deliver double-digit EPS growth in 2014 and the years ahead," Novak said.
In the United States, Yum! continues to find strength in its Taco Bell brand. In fact, the fast-food taco chain celebrated its eighth consecutive quarter of same-store sales growth in the fourth quarter. Going forward, Yum! Brands expects to deliver at least 20% earnings per share in 2014.
Shares of Yum! Brands were trading higher at around $68.62 as of 5:15 p.m. ET today.
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