Net income grew 9% to $454 million during the quarter. On a GAAP basis, diluted EPS grew 18% to $1.40 and on an adjusted basis, EPS grew 52% to $1.04. Analysts had projected adjusted EPS at $0.84.
Greg Creed, CEO, said, “We are pleased to deliver third-quarter system sales growth of 5%, consisting of same store sales growth of 2% and net new unit growth of 4%. Core operating profit growth of 2% was consistent with our expectations. We are now two years into our three year transformation and remain firmly on-track to becoming more focused, more franchised and more efficient. The collective power of our three iconic brands, anchored by our four key growth drivers, is helping us deliver long-term sustainable growth and higher returns for our stakeholders.”
Bleak comp sales adulterate Yum! Brands’ Q2 earnings beat as stock drops
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The company posted revenue increases at its Taco Bell and Pizza Hut divisions while the KFC unit saw a decline. Worldwide system sales, excluding foreign currency translation, grew 5%, with Taco Bell at 8%, KFC at 7% and Pizza Hut flat. Same-store sales grew 2% on a consolidated basis, with Taco Bell and KFC posting increases of 5% and 3%, respectively, while Pizza Hut saw a decline of 1%.
Yum! Brands opened 410 net new units for 4% net new unit growth. The company refranchised 134 restaurants for pre-tax proceeds of $193 million. These include 57 KFC units, 31 Pizza Hut units and 46 Taco Bell units.