Yum! Brands: Reports Solid Q1-2019 Growth

Louisville / KY. (yb) Yum! Brands Inc. reported results for the first-quarter ended March 31, 2019. Worldwide system sales excluding foreign currency translation grew 8 percent, with 7 percent net-new units and 4 percent same-store sales growth. First-quarter GAAP EPS was USD 0.83, a decrease of (35) percent. First-quarter EPS excluding Special Items was USD 0.82, a decrease of (8) percent.

Commentary

Greg Creed, CEO, said, «The third and final year of our transformation is underway and I’m thrilled with the progress towards our commitment to becoming a more focused, more franchised, and more efficient growth company. First-quarter results were a solid start to the year, reflecting particular strength at the KFC division and Taco Bell U.S. With this quarter, we have a healthy foundation to help us achieve our 2019 guidance. Through the lens of our four growth drivers, we continue to leverage our unprecedented scale and expand our capabilities with the goal of improving franchise economics and accelerating growth. We remain confident in our enviable business model and our commitment to lasting growth that maximizes shareholder value.»

First Quarter Highlights

• Worldwide system sales excluding foreign currency translation grew 8 percent, with KFC at 9 percent, Taco Bell at 7 percent, and Pizza Hut at 7 percent. Adjusting the prior year base to include Telepizza, system sales growth excluding foreign currency translation would have been 7 percent worldwide and 1 percent for the Pizza Hut Division.
• We opened 310 net units in the quarter. On a year-over-year basis, which takes into account the strategic alliance with Telepizza in the fourth-quarter 2018, net new unit growth was 7 percent.
• We repurchased 1.1 million shares totalling USD 106 million at an average price of USD 94.
• We reflected the change in fair value of our investment in Grubhub by recording USD 20 million of pre-tax investment expense, resulting in a negative (USD 0.05) impact in EPS. Our Grubhub investment unfavourably impacted year-over-year EPS growth by (USD 0.21).
• Foreign currency translation unfavourably impacted divisional operating profit by USD 19 million.

For additional information please read Yum! Brands’s PDF file below (783 KB):

20190504-YUM-Q1-2019.