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Yum buoyed by China as U.S. sales fall

Yum! Brands Inc. saw profits rise in the third quarter, lifted by strong sales in China and other emerging markets.

For the quarter ended Sept. 3, Yum’s net income rose 7 percent to $383 million, or 80 cents per share, compared with $357 million, or 74 cents per share, a year earlier.

Revenue for the quarter increased 14 percent to $3.27 billion, compared with $2.86 billion a year earlier. Top-line figures reflected same-store sales increases of 19 percent in China and 3 percent in the Yum Restaurants International division, which offset a 3-percent same-store sales decline in the United States.

In Yum’s struggling domestic system, same-store sales fell 2 percent at Taco Bell and 3 percent at both Pizza Hut and KFC. The company sold its A&W and Long John Silver’s brands to franchisee groups late last month, after the close of the quarter.

Chief executive David Novak said in a statement that Yum was “obviously disappointed in our U.S. performance,” which included a 16-percent profit slide.

“However, we have aggressively developed a pipeline of category-leading innovation and have productivity initiatives planned to dramatically improve sales and profit performance in 2012,” Novak said. “Looking ahead, the strength of our international brands and outstanding new-unit development, combined with aggressive U.S. initiatives, make us confident we will continue our track record of double-digit earnings growth next year and beyond.”

Louisville, Ky.-based Yum operates or franchises more than 38,000 restaurants in 110 countries.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN

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