US fastfood giant Yum! Brands has reported a rise in fourth-quarter and full-year earnings but said higher commodity costs would affect its US operations in the first quarter of 2005.
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The company, which owns Pizza Hut and KFC, reported net income of US$235m, or 77 cents per share, for the fourth quarter to 25 December, compared to $214m, or 70 cents per share, for the year-ago period. Earnings per share before special items rose 13% to 73 cents. Quarterly revenues rose to $2.79bn from $2.65bn a year earlier.
For the full year, the company reported net income of $740m, or $2.42 per share, compared to $617m, or $2.02 per share, for the previous year. Revenues were $9.01bn, up from $8.38bn in the previous year.
Total international system restaurants in operation at quarter’s end increased by 5% year-on-year. US multibrand restaurants in operation expanded by 23%.
“I am pleased to report 2004 was another year in which we showed the underlying power of our global portfolio of leading restaurant brands. Fuelled by continued profitable international expansion including dynamic growth in China, combined with another strong performance from Taco Bell in the United States, we achieved 15% EPS growth prior to special items, said David Novak, chairman and CEO.
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By GlobalDataThe company said it currently expects that it will achieve EPS of 51 cents prior to special items in the first quarter of 2005. US restaurant margins are expected to decrease slightly versus last year’s first quarter due to inflation in US commodity costs (meats and cheese). The effect of higher commodity costs is expected to moderate after the first quarter of 2005.
