China Shines for Yum, While India Looks Grim

Published By : 17 Jul 2014 | Published By : QYRESEARCH

The second quarter of 2013 saw Yum’s restaurants across China wrapped in a miasma of avian flu, and a food-safety scare leading to an unfortunate loss of 20%. However, the dark cloud’s silver lining seems to be finally glowing with KFC outlets in China which have shown significant growth this year. 

In fact, Yum recorded an increase of 15% in the second quarter, surpassing Consensus Metrix analysis which predicted it to be about 11.4%. This leap includes a 21% rise at KFC and good revenues at Pizza Hut Casual Dining.

But this positive growth rate isn’t the work of a mere magic wand. Yum has truly put in effort by revamping products at KFC China outlets to lure in more and more customers. About 35% of company’s operating profit in 2013 is attributable to its restaurants, most of which are KFCs.

Though the sun is shining for the oriental markets, the story of its western neighbor is a little different. Yes, India has shown a quarterly plummet of more than 2% in the extended-hours trading for Taco Bell and Pizza Hut Divisions. 

The drop comes as a shock since Yum has been \"investing aggressively\" in the Indian market. The same-restaurant sales were marginally higher at 2% for Taco Bell and down by 3% for Pizza Hut, as compared to a 3.6 percent gain for Taco Bell and a 0.1 percent rise for Pizza Hut expected by Consensus Metrix. 

The sales result for United States Yum businesses looks a little brighter though. David Novak, Chief Executive Officer said Taco Bell\'s breakfast launch in the U.S was a great success, but they were still working on improving the outcome of its Pizza Hut outlets. Yum outlets at Louisville, Kentucky reported net income of $334 million, or 73 cents per share in the second quarter of 2014 ending June 14. This is definitely a rise when compared to $281 million, or 61 cents per share exactly a year ago. 

By the end of 2014 the company is expecting a 20% full-year earnings-per-share growth
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