Yum! Brands, Inc. (NYSE: YUM), in advance of its Annual Investor
Meeting, now estimates mid-single-digit full-year 2014 EPS growth versus
prior year, excluding Special Items. Yum! expects to deliver at least
10% EPS growth in 2015, excluding Special Items.
Greg Creed, CEO effective January 1, 2015, said, “We are firmly
committed to returning to double-digit EPS growth in 2015, delivering at
least 10% growth with the potential to do significantly better. We fully
expect to bounce-back in China and benefit from tremendous sales
leverage as sales rebound. We have solid plans to drive same-store sales
growth and margin improvement in China, while continuing to open new
restaurants with confidence in the world’s fastest-growing economy.
Further, sustained momentum at our KFC and Taco Bell Divisions, and the
recent relaunch of our Pizza Hut U.S. business are also expected to
contribute to our double-digit EPS growth. Our brands are the global
leaders in their respective categories, and we expect to build on this
strength with breakthrough product innovation, insight-driven marketing
and digital leadership in the years ahead.
“Overall, we expect to open over 2,100 new international restaurants
next year, further strengthening our lead in emerging markets. We remain
focused on the three keys to driving shareholder value: same-store sales
growth, new-unit development and generating high returns on invested
capital. I’m confident we’ll deliver full-year EPS growth of at least
10% in 2015 and produce consistent double-digit EPS growth over the long
term.”
2014 EPS UPDATE
As previously reported, China Division sales were significantly impacted
by adverse publicity in July regarding improper food handling practices
by a former supplier. Sales continue to recover, but at a slower pace
than expected. We estimate China Division full-year same-store sales
will be negative mid-single digits. With this assumption, we now
estimate mid-single-digit full-year EPS growth, excluding Special Items.
2015 OVERALL GUIDANCE
Yum! Brands expects full-year EPS growth of at least 10%, excluding
Special Items, with meaningful upside opportunity contingent primarily
on the pace of our sales recovery in China. Our 2015 guidance is based
on the following expectations and assumptions:
-
China Division operating profit growth of at least 15%
-
KFC Division operating profit growth of 10%
-
Pizza Hut Division operating profit growth of 10%
-
Taco Bell Division operating profit growth of 6%
-
Over 2,100 gross new international units, including:
-
700 new units in China
-
700 new units at KFC
-
600 new units at Pizza Hut
-
125 new units in India
-
150 net new units at Taco Bell Division
-
Global capital expenditures of approximately $1.2 billion
-
Estimated tax rate for years 2015 – 2016 between 25% and 27%
-
Foreign currency translation expected to have a negative impact of at
least $20MM on earnings
-
Interest expense expected to be about $145MM
-
2% reduction in average diluted shares outstanding as a result of
share repurchases
2014 ANNUAL INVESTOR MEETING
The Annual Investor Meeting will be held on Thursday, December 11, 2014
from 8:45 am to 2:00 pm EST in New York City. The company will present a
business update and share its strategies and global expansion outlook.
This meeting will be webcast live and a replay of this webcast will be
available following the event. The webcast and presentations will be
available online through the Yum! Brands Investor Relations website at http://www.yum.com/investors.
ADDITIONAL INFORMATION
Definitions of terms are available online at www.yum.com
under “Investors”.
This announcement, any related announcements and the related webcast may
contain “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. We intend all forward-looking statements to be covered by
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts. Our
forward-looking statements are subject to risks and uncertainties, which
may cause actual results to differ materially from those projected.
Factors that can cause our actual results to differ materially include,
but are not limited to: food safety and food borne-illness issues;
changes in economic conditions, consumer preferences, tax rates and laws
and the regulatory environment, as well as increased competition and
other risks in China, where a significant and growing portion of our
restaurants are located; changes in economic and political conditions in
the other countries outside the U.S. where we operate; the impact or
threat of any widespread illness or outbreaks of viruses or other
diseases; our ability to protect the integrity and security of
individually identifiable data of our customers and employees; our
ability to secure and maintain distribution and adequate supply to our
restaurants; the success of our international development strategy;
commodity, labor and other operating costs; the continued viability and
success of our franchise and license operators; consumer preferences and
perceptions of our brands; the impact of social media; a potential
suspension of the Chinese affiliate of our independent auditor; pending
or future litigation and legal claims or proceedings; changes in or
noncompliance with government regulations; tax matters, including
disagreements with taxing authorities; significant changes in global
economic conditions, including consumer spending, consumer confidence
and unemployment; and competition within the retail food industry,
including with respect to price and quality of food products, new
product development, advertising levels and promotional initiatives,
customer service, reputation, restaurant location, and attractiveness
and maintenance of properties. You should consult our filings with the
Securities and Exchange Commission (including the information set forth
under the captions “Risk Factors” and “Forward-Looking Statements” in
our Annual Report on Form 10-K) for additional detail about factors that
could affect our financial and other results. Forward-looking statements
are based on current expectations and assumptions and currently
available data and are neither predictions nor guarantees of future
events or performance. You should not place undue reliance on
forward-looking statements, which speak only as of the date hereof. We
are not undertaking to update any of these statements.
Yum! Brands, Inc., based in Louisville, Kentucky, has over 40,000
restaurants in more than 125 countries and territories. Yum! is ranked
#216 on the Fortune 500 List with revenues of over $13 billion. In 2014
Yum! was named among the top 100 Corporate Citizens by Corporate
Responsibility Magazine and one of the Aon Hewitt Top Companies for
Leaders in North America. The Company's restaurant brands - KFC, Pizza
Hut and Taco Bell - are the global leaders of the chicken, pizza and
Mexican-style food categories. Outside the United States, the Yum!
Brands system opens over five new restaurants per day on average, making
it a leader in international retail development.
Copyright Business Wire 2014