By Anna Prior
Yum Brands Inc.'s fourth-quarter profit slipped 4.7%, but the
parent company of KFC, Taco Bell and Pizza Hut said it is making
progress in its efforts to bolster flagging KFC sales in China.
Yum's adjusted earnings topped Wall Street's expectations and
the company reiterated its earnings outlook for the year.
Chief Executive David C. Novak affirmed the company's goal of
attaining at least 20% earnings-per-share growth in 2014, saying
the company is confident in its ability to "re-establish our track
record of double-digit EPS growth."
The restaurant company has been trying to recover from
food-safety concerns in China--the company's biggest
market--related to KFC chicken suppliers more than a year ago. In
November, Yum began an advertising and social-media campaign to
assure people that its food is safe, and late last year promised
major new initiatives to improve its KFC brand in China during
2014.
Earlier this month, Yum said same-store sales in China fell 4%
for the fourth quarter.
Still, the company is "seeing upward momentum in the KFC China
business, " Senior Vice President of Public Affairs Jonathan Blum
said on Monday, noting a trend of improving sequential same-store
sales each month during the quarter.
As for the U.S., Yum said same-store sales fell 2% for the most
recent period, led by a 5% same-store sales decline at KFC and a 4%
drop at Pizza Hut. Taco Bell, however, posted 1% same-store sales
growth for the quarter.
For the fourth quarter, Yum reported a profit of $321 million,
or 70 cents a share, down from $337 million, or 72 cents a share, a
year earlier. Excluding special items such as a tax benefit,
pension settlements and other items, adjusted earnings rose to 86
cents a share from 83 cents a share.
Revenue edged up 0.6% to $4.18 billion.
Analysts polled by Thomson Reuters were expecting per-share
earnings of 80 cents on revenue of $4.26 billion.
Yum's world-wide restaurant margin declined to 14.2% from 14.4%,
with the biggest decline coming from Yum Restaurants International
division.
Through Monday's close, the stock has edged up 0.4% in the last
12 months.
Write to Anna Prior at anna.prior@wsj.com
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