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Yum! Brands, Inc. (YUM - Free Report) has delivered better-than-expected results in the first quarter of 2019.
Adjusted earnings of 82 cents per share surpassed the Zacks Consensus Estimate of 80 cents by 2.5%. However, the bottom line decreased 8% on a year-over-year basis. While the shift to refranchising substantially helped the company’s operating margin, pre-tax investment expenses negatively impacted earnings in the quarter under review.
Total revenues of $1,254 million were down 9% year over year butsurpassed the consensus estimate of $1,247 million. This downside was caused by decreased sales, owing to the company’s continued refranchising initiatives.
Worldwide system sales, excluding foreign currency translation, grew 8%, with Taco Bell at 7%, KFC at 9% and Pizza Hut at 7% in the quarter under review. Also, the company opened 310 net new units, reflecting 7% unit growth.
Notably, shares of Yum! Brands have gained 30.1% in the past year, outperforming the industry’s rally of 13.2%.
Segmental Performance
Yum! Brands reports results under three segments — KFC, Pizza Hut and Taco Bell.
Revenues from KFC totaled $566 million, down 14% on a year-over-year basis. Comps at this division increased 5%, higher than the year-ago quarter’s comps growth of 2% and the fourth quarter’s increase of 3%.
This segment’s operating margin was up 810 basis points (bps) to 41.7% year over year, owing to refranchising and same-store sales growth, partially offset by the negative impact of foreign currency translation.
At Pizza Hut, revenues amounted to $243 million, down 3% on a year-over-year basis. Comps remained flat compared with the year-ago quarter’s increase of 1%.Comps were also flat in the fourth quarter of 2018.
The segment’s operating margin was up 510 bps year over year to 40.1%,driven by refranchising, and lower franchise and property expenses due to lower advertising spend associated with the U.S. Transformation Agreement.
Taco Bell’s revenues were $445 million, down 4% from the year-ago quarter. Comps rose 4% in the reported quarter, which compared favorably with the year-ago quarter’s growth of 1%. In fourth-quarter 2018, the segment’s comps gained 6%.
This segment’s operating margin was up 250 basis points to 31% year over year.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
Cash and cash equivalents as of Mar 31, 2019, totaled $278 million compared with $292 million as of Dec 31, 2018. Long-term debt at the end of the reported quarter was $9,736 million compared with $9,751 million at the end of 2018. During the quarter, the company repurchased 1.1 million shares for $106 million.
Darden (DRI - Free Report) reported third-quarter fiscal 2019 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of $1.80 per share beat the Zacks Consensus Estimate of $1.75. Moreover, the bottom line increased 5.3% year over year on the back of higher revenues.
Chipotle (CMG - Free Report) reported better-than-expected results in the first quarter of 2019. Adjusted earnings of $3.40 per share surpassed the Zacks Consensus Estimate of $3.01 by 13%. The bottom line also grew 59.6% from the year-ago quarter, backed by increased revenues and lower food costs.
Domino’s (DPZ - Free Report) reported mixed first-quarter 2019 financial numbers, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings of $2.20 per share surpassed the Zacks Consensus Estimate of $2.07 and increased 10% on a year-over-year basis. The bottom-line improvement was driven by higher net income and lower diluted share count as a result of share repurchases.
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Yum! Brands (YUM) Q1 Earnings & Revenues Beat Estimates
Yum! Brands, Inc. (YUM - Free Report) has delivered better-than-expected results in the first quarter of 2019.
Adjusted earnings of 82 cents per share surpassed the Zacks Consensus Estimate of 80 cents by 2.5%. However, the bottom line decreased 8% on a year-over-year basis. While the shift to refranchising substantially helped the company’s operating margin, pre-tax investment expenses negatively impacted earnings in the quarter under review.
Total revenues of $1,254 million were down 9% year over year butsurpassed the consensus estimate of $1,247 million. This downside was caused by decreased sales, owing to the company’s continued refranchising initiatives.
Worldwide system sales, excluding foreign currency translation, grew 8%, with Taco Bell at 7%, KFC at 9% and Pizza Hut at 7% in the quarter under review. Also, the company opened 310 net new units, reflecting 7% unit growth.
Notably, shares of Yum! Brands have gained 30.1% in the past year, outperforming the industry’s rally of 13.2%.
Segmental Performance
Yum! Brands reports results under three segments — KFC, Pizza Hut and Taco Bell.
Revenues from KFC totaled $566 million, down 14% on a year-over-year basis. Comps at this division increased 5%, higher than the year-ago quarter’s comps growth of 2% and the fourth quarter’s increase of 3%.
This segment’s operating margin was up 810 basis points (bps) to 41.7% year over year, owing to refranchising and same-store sales growth, partially offset by the negative impact of foreign currency translation.
At Pizza Hut, revenues amounted to $243 million, down 3% on a year-over-year basis. Comps remained flat compared with the year-ago quarter’s increase of 1%.Comps were also flat in the fourth quarter of 2018.
The segment’s operating margin was up 510 bps year over year to 40.1%,driven by refranchising, and lower franchise and property expenses due to lower advertising spend associated with the U.S. Transformation Agreement.
Taco Bell’s revenues were $445 million, down 4% from the year-ago quarter. Comps rose 4% in the reported quarter, which compared favorably with the year-ago quarter’s growth of 1%. In fourth-quarter 2018, the segment’s comps gained 6%.
This segment’s operating margin was up 250 basis points to 31% year over year.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
Yum! Brands, Inc. Price, Consensus and EPS Surprise | Yum! Brands, Inc. Quote
Other Financial Details
Cash and cash equivalents as of Mar 31, 2019, totaled $278 million compared with $292 million as of Dec 31, 2018. Long-term debt at the end of the reported quarter was $9,736 million compared with $9,751 million at the end of 2018. During the quarter, the company repurchased 1.1 million shares for $106 million.
Zacks Rank & Peer Releases
Yum! Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Darden (DRI - Free Report) reported third-quarter fiscal 2019 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of $1.80 per share beat the Zacks Consensus Estimate of $1.75. Moreover, the bottom line increased 5.3% year over year on the back of higher revenues.
Chipotle (CMG - Free Report) reported better-than-expected results in the first quarter of 2019. Adjusted earnings of $3.40 per share surpassed the Zacks Consensus Estimate of $3.01 by 13%. The bottom line also grew 59.6% from the year-ago quarter, backed by increased revenues and lower food costs.
Domino’s (DPZ - Free Report) reported mixed first-quarter 2019 financial numbers, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings of $2.20 per share surpassed the Zacks Consensus Estimate of $2.07 and increased 10% on a year-over-year basis. The bottom-line improvement was driven by higher net income and lower diluted share count as a result of share repurchases.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>