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YUM! BRANDS, INC.

(YUM)
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Yum Brands : Digital drives big sales growth for Yum Brands

04/28/2021 | 11:30am EDT

Worldwide sales grew 11% and same-store sales spiked 9% for Yum Brands Inc.'s first quarter ended March 31.

The main driver, according to an earnings announcement, was digital capabilities and the fact more consumers are heading out to eat as COVID-19 pandemic concerns are ebbing.

Yum! Brands operates the brands KFC, Pizza Hut, Taco Bell, The Habit Burger Grill, and WingStreet worldwide, except in China, where the brands are operated by a separate company, Yum China.

Kentucky Fried Chicken and Taco Bell enjoyed a 11% worldwide sales spike while Pizza Hut had a 7% sales growth.

The earnings results saw company shares rise less than 1% in premarket trading after the earnings call early this morning, according to a CNBC report.

The company saw record digital sales of over $5 billion, according to the earnings announcement and unit growth of 1%. According to the announcement EPS was $1.07 and first-quarter EPS, excluding special items, was also $1.07, an increase of 67% over the prior year quarter. The company saw a 1% unit growth year-over-year and net new unit growth of 435 during the quarter.

"First-quarter results reflect encouraging momentum across our business, including solid 2-year same-store sales growth and a meaningful uplift in unit development, underpinned by the focus and collaboration of our franchise partners and restaurant teams around the world," said CEO David Gibbs in the announcement . "During the quarter we took important steps to further boost our digital and marketing capabilities through the acquisitions of two technology-focused companies that will enhance our ability to grow our sales overnight and our brands over time. Our foundation is strong and our path forward is clear. While uncertainties remain due to the ongoing impact of COVID-19 in many geographies, with our iconic brands, world-class talent and a healthy franchise system we are poised to enter a post-COVID world with a long runway of growth ahead of us."

Earnings highlights included:

KFC

  • Operating margin increased 8.4 percentage points driven by same-store sales growth, lower bad debt expense, and unit growth.
  • KFC Division opened 409 restaurants in 50 countries.
  • KFC International's same-store sales declined 2% on a 2-year basis, which includes the impact of about 2% of stores being temporarily closed as of the end of the first-quarter 2021.
  • KFC U.S., same-store sales grew 11% on a two-year basis, which includes the impact of less than 1% of stores temporarily closed as of the end of the first-quarter 2021.

Pizza Hut Division

  • Opened 172 restaurants in 33 countries.
  • Operating margin increased 8 percentage points driven by same-store sales growth, lower bad debt expense, and lower general and administrative expenses, partially offset by the impact of prior year permanent unit closures.
  • Pizza Hut U.S. off-premise channel generated 23% same-store sales growth.
  • Pizza Hut Division's same-store sales declined 1% on a 2-year basis, which includes the impact of about 3% of stores being temporarily closed as of the end of the first-quarter 2021.
  • For Pizza Hut International, same-store sales declined 7% on a 2-year basis, which includes the impact of about 3% of stores being temporarily closed as of the end of the first-quarter 2021.
  • Pizza Hut U.S. same-store sales grew 8% on a two-year basis, which includes the impact of about 3% of stores being temporarily closed as of the end of the first-quarter 2021.

Taco Bell Division

  • Opened 73 restaurants in nine countries.
  • Operating margin increased 4.7 percentage points due to same-store sales growth and lower general and administrative expenses.
  • Same-store sales grew 10% on a two-year basis, which includes the impact of less than 1% of stores being temporarily closed as of the end of the first-quarter 2021.

Habit Burger Grill Division

  • Opened six restaurants in the U.S and Cambodia.
  • Same-store sales grew 13%.
  • For the division, same-store sales grew 3% on a two-year basis, which includes the impact of about 2% stores that were temporarily closed as of the end of the first-quarter 2021.

Copyright © 2021 Networld Media. All rights reserved., source Industry News

Stocks mentioned in the article
ChangeLast1st jan.
YUM CHINA HOLDINGS, INC. 0.01% 69.34 Delayed Quote.21.46%
YUM! BRANDS, INC. -1.16% 118.2 Delayed Quote.10.22%
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Financials (USD)
Sales 2021 6 351 M - -
Net income 2021 1 264 M - -
Net Debt 2021 10 297 M - -
P/E ratio 2021 28,4x
Yield 2021 1,67%
Capitalization 35 644 M 35 644 M -
EV / Sales 2021 7,23x
EV / Sales 2022 6,87x
Nbr of Employees 38 000
Free-Float 99,8%
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Technical analysis trends YUM! BRANDS, INC.
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 120,45 $
Last Close Price 119,65 $
Spread / Highest target 18,7%
Spread / Average Target 0,67%
Spread / Lowest Target -22,3%
EPS Revisions
Managers and Directors
NameTitle
David W. Gibbs Chief Executive Officer & Director
Chris Turner Chief Financial Officer
Brian C. Cornell Non-Executive Chairman
Clay Johnson Chief Technology & Digital Officer
Brian Cahoe Chief Development Officer
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