Yum Brands (YUM) Disappoints in Third Quarter Earnings Report

Jacob Harper |

The restaurant holding group Yum! Brands (YUM) , which is the parent company of KFC and Taco Bell, issued its third quarter earnings report after the bell on Tuesday, and they were a big disappointment. The company, which owns fast food locations around the world, revealed that sales slipped in China far more than estimated, which contributed to Yum falling short of overall revenue projections.

Yum reported a same-store drop of 11 percent in China, where the company does over half of their business. While they experienced an increased presence in emerging markets, sales were flat in the US, and operating profit in China fell 14 percent.

In China alone, Yum owns 4,463 KFC franchise locations to go along with 953 Pizza Hut Casual Dining and 185 Home Delivery units. Sales in that country were severely affected by a bird flu scare.

The company’s acquisition of Little Sheep was of further concern for Yum. The Mongolian “hot pot” restaurant chain came under Yum’s control in 2012, and since then has lost significant amount of money. Yum reported a special $258 million net impairment from the acquisition of Little Sheep.

For their third quarter 2013 earnings report, Yum! Brands reported a net gain of $152 million, or $0.85 per share, versus the net gain of $471 million, or $0.99 per share, from the same period a year ago. Revenue for the quarter was $3.46 billion, as compared to $3.6 billion from the previous year. Analysts were expecting a net gain of $0.93 per share on revenues of $3.53 billion.

 

(image courtesy of WIkimedia Commons)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
YUM Yum! Brands Inc. 64.42 0.96 1.51 2,161,637
AZSEY Allianz SE ADR (Sponsored) Repstg 1/10 Sh 16.88 0.35 2.12 261,877

Comments

Emerging Growth

AfterMaster Inc

Studio One Media Inc is a diversified media and technology company. It is engaged in the development and commercialization of proprietary, edge audio and video technologies for professional and consumer…

Private Markets

Trustify

Trustify provides trust and safety in both the digital and physical worlds through our vast network of on-demand Private Investigators.By removing the large retainers and high hourly rates that traditional…

Cloudera

Cloudera offers enterprises a new data platform built on the Apache Hadoop open-source software package. Hadoop is a data-management platform that can consolidate data in a single repository for comprehensive…