The chain is making more money from each visit, which isn't the worst news. But it's competitors are on track to perform much better this quarter.
— Jason Clampet
The company that runs the KFC, Taco Bell and Pizza Hut chains easily beat first-quarter expectations, but that was overshadowed Wednesday by tepid sales at established restaurants.
Shares of Yum Brand Inc. slid more than 5 percent before the opening bell.
Worldwide sales at restaurants open at least a year climbed 1 percent in the quarter. That’s down from last year’s 2 percent growth. Industry analysts had expected that number to remain flat, not decline, according to a FactSet survey.
Net income soared 55 percent to $433 million, or $1.27 per share. Removing a number of nonrecurring gains, per-share profit was 90 cents, far outpacing Wall Street projections for 76 cents, according to a survey by FactSet.
The company made $280 million, or 77 cents per share, a year earlier.
Yum got a boost from refranchising restaurants, as well as $66 million related to a deal with GrubHub. In February, Yum began expanding home delivery nationwide in partnership with GrubHub.
Revenue for the Louisville, Kentucky, company was $1.37 billion, with increased sales at KFC, Taco Bell and Pizza Hut. That also beat the $1.08 billion that industry analysts had expected.
At Pizza Hut, comparable-store sales rose 1 percent compared with a 3 percent decline in the year-ago period. KFC’s same-store sales growth of 2 percent was flat with the prior-year figure. Taco Bell’s same-store sales rose 1 percent, slowing from a year earlier when it achieved 8 percent growth.