Yum! Brands Inc. – Q2 FY 2011 Earnings Preview
By:NewsyStocks   Tuesday, July 05, 2011 11:09 AM

The world's largest food company, Yum! Brands Inc. (NYSE: YUM) is expected to report its fiscal second-quarter FY 2011 earnings results on July 13, 2011. In the last quarter ended March, 2011, the company's reported EPS missed analysts' consensus forecast by margin of 1.60 percent. On May 19, 2011, the company's board of directors declared a dividend of $0.25 per share of common stock, which will be distributed August 5, 2011, to shareholders of record at the close of business on July 15, 2011.

YUM is the world's largest quick service restaurant company based on number of system units, with more than 37,000 units in more than 110 countries and territories.  Through its KFC, Pizza Hut, Taco Bell, LJS and A&W brands, the company develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of competitively priced food items. YUM consists of six operating segments:  KFC-U.S., Pizza Hut-U.S., Taco Bell-U.S., Long John Silver's-U.S. and A&W All American Food Restaurants -U.S., YUM Restaurants International and YUM Restaurants China.

For Q1 FY 2011

  • Yum! Brands' revenue rose 3 percent to $2.42 billion, compared with revenue of $2.34 billion in the same quarter last year.
  • Net income increased approximately 10 percent to $264 million, from $241 million in the comparable quarter last year.
  • Earnings per share were $0.54 per diluted share, compared with earnings of $0.50 per diluted share in the first quarter FY 2010.
  • Worldwide operating profit grew 5 percent, including 18 percent increase in China and 8 percent in Yum! Restaurants International (YRI), partially offset by a 13 percent decrease in the U.S.
  • Same-store sales grew 13 percent in China and 2 percent in YRI, with a 1 percent decline in the U.S.
  • The company opened 223 new restaurants internationally, including 92 new units in China.
  • Share repurchases during the quarter totaled $142 million for 2.9 million shares at an average price of $49 per share.

For FY 2010

For full year 2010, the company reported sales of $11.34 billion, up 5 percent, compared with sales of $10.83 billion in FY 2009. Net income for the year was $1.15 billion, or $2.38 per diluted share, representing an increase of 7.7 percent and 7.2 percent, respectively, compared with net income of $1.07 billion or $2.22 per diluted share.

FY 2011 Company's Guidance

In FY 2011, Yum! Brands expects to deliver at least 10 percent EPS growth. The company also expects profit growth of 15 percent in China and 10 percent for YRI. In the U.S. the company expects profit to grow by 3 percent in FY 2011.

Analysts Forecast

For the second quarter, analysts' EPS estimates range from a low of $0.58 to a high of $0.63 per share, compared with a consensus estimate of $0.58 per share to $0.61 per share in the year ago quarter. For this quarter, analysts' revenue estimates range from a low of $2.61 billion to a high of $2.83 billion, compared with a consensus estimate of $2.57 billion to $2.70 billion in the same quarter a year ago. For the second quarter, the consensus EPS forecast has been decreased from $0.63 per share estimated 60 days ago to the current estimate of $0.61 per share. YUM last traded at $53.84, down 0.56 points, or 1.03 percent, on Friday.