Yum Brands big 1Q numbers overshadowed by same-store sales

NEW YORK — 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 per cent before the opening bell.

Worldwide sales at restaurants open at least a year climbed 1 per cent in the quarter. That’s down from last year’s 2 per cent growth. Industry analysts had expected that number to remain flat, not decline, according to a FactSet survey.

Net income soared 55 per cent 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 per cent compared with a 3 per cent decline in the year-ago period. KFC’s same-store sales growth of 2 per cent was flat with the prior-year figure. Taco Bell’s same-store sales rose 1 per cent, slowing from a year earlier when it achieved 8 per cent growth.