LOUISVILLE Ky. Sales and profit growth in China and other overseas markets offset Yum! Brands Inc.'s weakness in the United States, helping the quick-service company post a 6-percent increase in fourth-quarter net income.
For the fourth quarter ended Dec. 26, Yum earned $216 million, or 45 cents per share, compared with earnings of $204 million, or 43 cents per share, in the same quarter of 2008.
Latest quarter revenue totaled $3.37 billion, a 1-percent decline from a year ago, which was attributed to negative effects from foreign currency exchange rates and refranchising efforts that reduced the number of corporate restaurants. For example, in the U.S. alone, 255 corporate restaurants were sold to franchisees during the fourth quarter.
Detailed and updated unit count information for the company was unavailable at press time. It operates or franchises more than 37,000 restaurants worldwide.
Total system sales growth for the fourth quarter totaled 8 percent in mainland China and 2 percent in Yum’s international division, but was offset by a 7-percent decline in the United States.
The sales results reflected a same-store sales decline of 8 percent in the fourth quarter for U.S. operations, including declines of 5 percent at Taco Bell, 8 percent at KFC and 12 percent at Pizza Hut.
U.S. fourth-quarter operating profit declined 23 percent from a year ago because of the weaker same-store sales, an increase in franchise-related expenses and higher expenses related to restaurant closures, Yum said. In comparison, Yum's operating profit in China rose 24 percent.
To turn around U.S. operations, Yum chief executive David Novak said the company is “aggressively developing incremental sales layers including breakfast, new beverages and expanded protein options.”
“Our goal is to provide more meaningful menu variety to our customers and leverage our assets throughout the day,” he said. “We are putting these same building blocks in place to drive long-term growth at Taco Bell in the U.S., where we are also making steady progress transforming and restructuring our Pizza Hut and KFC businesses.”
For the full year, the company earned $1.07 billion, or $2.22 per share, on revenue of $10.84 billion. A year earlier, Yum earned $964 million, or $1.96 per share.
International development continued at a strong pace with 1,467 new restaurants opened in 2009, including 509 new units in mainland China and 898 new units in Yum’s other overseas markets.