YUM! Brands Earnings Cheat Sheet for the Second Quarter
Results: Net income for YUM! Brands, Inc. rose to $316 million (65 cents per share) vs. $286 million (59 cents per share) in the same quarter a year earlier. This marks a rise of 10.5% from the year earlier quarter.
Revenue: Rose 9.4% to $2.82 billion from the year earlier quarter.
Actual vs. Wall St. Expectations: YUM reported adjusted net income of 66 cents per share. By that measure, the company beat the mean estimate of 61 cents per share. Estimates ranged from 58 cents per share to 63 cents per share. It beat the average revenue estimate of $2.7 billion.
Quoting Management: David C. Novak, Chairman and CEO said, “I’m pleased to report we are raising our full year EPS growth forecast to at least 12% based on the continued strength of our international businesses. We delivered EPS growth of 13% in the second quarter as strong performance in China and other emerging markets, combined with the benefit of a lower tax rate, offset a very disappointing quarter in the U.S.”
The company has now seen net income rise in four straight quarters. In the first quarter, net income rose 9.5% while the figure climbed 26.9% in the fourth quarter of the last fiscal year and 6.9% in the third quarter of the last fiscal year from the year earlier.
From the first quarter, the company’s current liabilities fell to $1.71 billion from $2.29 billion.
Gross margin shrank 0.8 percentage point to 26.2%. The contraction appeared to be driven by increased costs, which rose 10.6% from the year earlier quarter while revenue rose 9.4%.
Revenue has risen the past four quarters. Revenue increased 3.4% to $2.42 billion in the first quarter. The figure rose 5.9% in the fourth quarter of the last fiscal year from the year earlier and climbed 3% in the third quarter of the last fiscal year from the year-ago quarter.
The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 63 cents versus a mean estimate of net income of 64 cents per share.
Competitors to Watch: McDonald’s Corporation (NYSE:MCD), Wendy’s Arby’s Group Inc. (NYSE:WEN), Carrols Restaurant Group, Inc. (NASDAQ:TAST), Morgan’s Foods, Inc. (MRFD), Papa John’s Int’l, Inc. (NASDAQ:PZZA), Domino’s Pizza, Inc. (NYSE:DPZ), Chipotle Mexican Grill, Inc. (NYSE:CMG), Nathan’s Famous, Inc. (NASDAQ:NATH), Jack in the Box Inc. (NASDAQ:JACK), Starbucks Corporation (NASDAQ:SBUX), Sonic Corporation (NASDAQ:SONC) and AFC Enterprises, Inc. (NASDAQ:AFCE).
(Source: Xignite Financials)