Yum! Brands: Core operating profit up 21% in Q1/2016

Louisville / KY. (yb) Yum! Brands Inc. reported results for the first quarter ended March 19, 2016, including EPS of 0.95 USD excluding Special Items. On a reported basis, EPS was 0.93 USD and operating profit growth was 12 percent. Core operating profit growth and core operating margin growth figures exclude foreign currency translation and Special Items. First quarter highlights:

• Worldwide system sales increased 5 percent.
• Worldwide same-store sales increased 2 percent.
• Worldwide core operating profit increased 21 percent.
• EPS excluding Special Items increased 19 percent to 0.95 USD. Reported EPS increased 14 percent to 0.93 USD.
• Foreign currency translation negatively impacted operating profit by 28 million USD.
• Opened 295 new restaurants worldwide; 72 percent of international development occurred in emerging markets.
• On track with China separation to be complete by year end.

Change	System Sales	Same-Store Sales	Units	Core Operating Profit	Core Operating Margin (ppts)
China Division	+11%	+6%	+5%	+42%	+4.6%
KFC Division	+5%	+1%	+2%	+4%	+0.3%
Pizza Hut Division	+4%	+3%	+1%	+9%	+2.6%
Taco Bell Division	+3%	+1%	+3%	+4%	+1.5%
Worldwide	+5%	+2%	+2%	+21%	+2.9%

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Chief Executive Greg Creed: «I am very pleased with our results in the first quarter, including better-than-expected core operating profit growth of 21 percent, driven by 42 percent growth in our China business. KFC China had an outstanding Chinese New Year bucket promotion leading to 12 percent same-store sales growth for the quarter, underscoring the power of delivering insight-driven marketing that resonates with our customers. Companywide, all four of our Divisions posted positive same-store sales and core operating profit growth. I’m especially encouraged by the continued turnaround of our Pizza Hut U.S. business, which delivered 5 percent same-store sales growth».

«While it’s early in the year and there may be bumps in the road, we’re confident in raising core operating profit growth guidance to 12 percent, from 10 percent previously. This is a transformational year for our company as we remain on track to finalize the separation of our China business by year end. We look forward to establishing two powerful, independent, focused growth companies dedicated to building on our brand strengths and rewarding our shareholders».