Yum! Brands Inc. reported Tuesday that same-store sales turned positive in its important China market during the third quarter ended September 5, but recovery is proceeding more slowly than expected.
Shares of Yum! Brands (NYSE:YUM) traded up 0.45% on Tuesday, reaching $83.42. Analysts had been expecting earnings of $1.06 per share and $3.68 billion in revenue for the quarter.
The company’s stock was trading at $67.95 per share, down by 18.68% around 7:36 PM in New York.
Taco Bell’s year-to-date earnings were $387 million-up 22% from the same nine months of last year.
In August, Yum said longtime China division leader Sam Su was stepping down and being replaced by company veteran Micky Pant.
India Division system sales reduced 9%, as 10% unit growth was offset by an 18% same-store sales decline. But he did say the company would delve into more detail in its earnings conference call tomorrow morning.
Meanwhile, the KFC Division built on last quarter’s momentum, with system sales up 6% on a constant currency basis, including 3% unit growth and 3% same-store-sales growth.
Yum! Brands operates Pizza Hut (426 stores), KFC (378 stores) and Taco Bell (7 stores) outlets in India.
During the same period past year, the firm earned $0.87 earnings per share. However, they’re now projecting same store sales to be in the negative by the low single digits. Brands now expects to 2015 EPS growth to be “well below” its previous target of at least 10%. The company increased its quarterly dividend by 12%. Other restaurants are managed by New Delhi-based Devyani worldwide and Yum itself.
“Our central goal remains building three iconic, global brands people trust and champion”. “I’m confident that this formula will produce strong, sustainable EPS growth over the long term”. RBC Capital restated a “top pick” rating and issued a $103.00 price target on shares of Yum!
“The pace of recovery in our China division is now below our expectations”, Yum CEO Greg Creed said in a statement. YUM develops, operates, franchises and licenses a system of both conventional and non traditional Quick Service Restaurants (QSR), which prepare, package and sell a menu of food items.