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Yum! Brands Reports Third-Quarter EPS Growth Of 19%, Excluding Special Items; Strong Sales And Operating Profit Performance Across All Divisions; Raises Full-Year 2012 EPS Growth Forecast To At Least 13%

Stocks in this article: YUM

Yum! Brands Inc. (NYSE: YUM) today reported results for the third quarter ended September 8, 2012 including EPS of $0.99, excluding Special Items. Reported EPS for the quarter was $1.00. Yum! raises full-year EPS growth forecast to at least 13%, or at least $3.24, excluding Special Items.


  • Worldwide operating profit grew 18%, prior to foreign currency translation, including 22% in China, 14% at Yum! Restaurants International (YRI) and 13% in the U.S. Worldwide operating profit increased 16%, after foreign currency translation.
  • Worldwide restaurant margin increased 1.9 percentage points to 18.9%, including increases of 0.1 percentage points in China, 1.0 percentage point at YRI and 4.6 percentage points in the U.S. Restaurant margin increased 0.6 percentage points in China excluding Little Sheep.
  • Worldwide system sales grew 6%, prior to foreign currency translation, including 22% in China, 4% at YRI and 1% in the U.S.
    • Worldwide system sales growth was 8%, excluding the acquisition of Little Sheep and the 2011 divestiture of Long John Silver's and A&W All-American Restaurants, including 19% in China, 5% at YRI and 6% in the U.S.
  • Same-store sales grew 6% in China, 2% at YRI and 6% in the U.S. YRI same-store sales were negatively impacted by 1 percentage point due to the timing of Ramadan.
  • Strong international development continued with 394 new restaurants opened, including 192 new units in China and 181 new units at YRI; 86% of this development occurred in emerging markets.
  • On September 20, 2012, the Company announced an 18% increase in its quarterly dividend, marking the eighth consecutive year the dividend increased at a double-digit percentage rate.

Full-year EPS growth forecast raised to at least 13%, or at least $3.24, excluding Special Items.


Third Quarter







% Change





% Change

EPS Excluding Special Items $0.99 $0.83 19% $2.42 $2.12 14%
Special Items Gain/(Loss) 1 $0.01 $(0.03) NM $0.23 $(0.13) NM
EPS   $1.00   $0.80   25%     $2.65   $1.99   33%

1 See Reconciliation of Non-GAAP Measurements to GAAP Results for further detail of the Special Items. Special Items for 2012 are primarily related to the Little Sheep acquisition gain and net U.S. refranchising gains, partially offset by Pizza Hut UK impairment.


Note: All comparisons are versus the same period a year ago and exclude Special Items unless noted.


David C. Novak, Chairman and CEO, said, “Very strong sales and profit at all of our divisions, including China, Yum! Restaurants International, India and the U.S., drove 19% third-quarter EPS growth. Given the strength of our year-to-date results, I’m pleased to report we are raising our full-year EPS growth forecast to at least 13%, excluding Special Items.

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