Fast food chain operator Yum Brands (YUM) reported first-quarter earnings lower than the prior year, but the owner of KFC, Pizza Hut and Taco Bell still beat Wall Street expectations.
Shares were sliding 2.9% to $101.42.
The Louisville, Kentucky-based company posted first-quarter net income of $262 million, or 83 cents a share, down from $433 million, or $1.27 a share, a year ago. Adjusted earnings were 82 cents a share, beating analysts' expectations of 81 cents. Revenue totaled $1.25 billion, down from $1.37 billion last year, but met Wall Street's estimate.
The primary reason for the difference in net income between the year ago quarter and the current quarter is the one-time refranchising gains that occurred in 2018, but were not expected in 2019, a company spokesman said.
Worldwide same-store sales rose 4%. KFC same-store sales increased 5%, Pizza Hut same-store sales broke even, and Taco Bell grew 4%. Analysts expected global same-store sales growth of 2.7%, with KFC growth of 3%, Pizza Hut growth of 0.4%. and Taco Bell growth of 4.6%.
"First-quarter results were a solid start to the year, reflecting particular strength at the KFC division and Taco Bell U.S.," said CEO Greg Creed in a statement. "With this quarter, we have a healthy foundation to help us achieve our 2019 guidance."
The company said its Grubhub investment hurt year-over-year earnings growth by 21 cents a share. Foreign currency translation unfavorably impacted divisional operating profit by $19 million. During the quarter, Yum said it repurchased 1.1 million shares totaling $106 million at an average price of $94.