YUM! Brands (YUM) Stock Up On Q4 Earnings & Revenues Beat
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YUM! Brands, Inc. (YUM Quick Quote YUM - Free Report) reported strong fourth-quarter 2020 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Both the metrics also improved year over year. Following the results, the company’s shares are up 2.9% in a pre-market trading session.
Strong digital sales, and the company’s capabilities to adjust operations, menu options, and marketing worldwide helped it amid the challenging scenario. In 2020, digital sales amounted to $17 billion, up 45% year over year.
The company’s adjusted earnings of $1.15 beat the Zacks Consensus Estimate of 99 cents. In the prior-year quarter, the company had reported adjusted earnings of $1.00.
YUM! Brands’ total revenues of $1,743 million surpassed the consensus estimate of $1,731 million. The top line also improved 3% year over year. The upside can be attributed to increasing in company sales.
Worldwide system sales — excluding foreign currency translation — declined 2% year over year with Taco Bell, KFC, and Pizza Hut decreasing 3%, 1%, and 6%, respectively.
Yum Brands, Inc. Price, Consensus and EPS Surprise
Yum Brands, Inc. price-consensus-eps-surprise-chart | Yum Brands, Inc. Quote
Divisional Performance
YUM! Brands primarily reports results under three divisions — KFC, Pizza Hut, and Taco Bell.
For fourth-quarter 2020, revenues from KFC totaled $711 million, down 3% year over year. Comps at this division declined 2% against the year-ago quarter’s growth of 3%.
This segment’s operating margin contracted 140 basis points (bps) year over year to 37.6% primarily due to increase in general and administrative expenses and dismal franchise same-store sales.
In the quarter under review, KFC Division opened 587 gross new restaurants.
At Pizza Hut, revenues amounted to $289 million, down 3% on a year-over-year basis. Comps declined 1% in the reported quarter, compared with a decrease of 2% in the prior-year quarter.
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