By Dow Jones Business News,
February 03, 2014, 06:47:00 PM EDT
By Anna Prior
Yum Brands Inc.'s fourth-quarter profit slipped 4.7%, but the parent company of KFC, Taco Bell and Pizza Hut said
it is making progress in its efforts to bolster flagging KFC sales in China.
Yum's adjusted earnings topped Wall Street's expectations and the company reiterated its earnings outlook for the
Chief Executive David C. Novak affirmed the company's goal of attaining at least 20% earnings-per-share growth in
2014, saying the company is confident in its ability to "re-establish our track record of double-digit EPS growth."
The restaurant company has been trying to recover from food-safety concerns in China--the company's biggest market-
-related to KFC chicken suppliers more than a year ago. In November, Yum began an advertising and social-media campaign
to assure people that its food is safe, and late last year promised major new initiatives to improve its KFC brand in
China during 2014.
In January, Yum said same-store sales in China fell 4% for the fourth quarter.
Still, the company is "seeing upward momentum in the KFC China business, " Senior Vice President of Public Affairs
Jonathan Blum said on Monday, noting a trend of improving sequential same-store sales each month during the quarter.
As for the U.S., Yum said same-store sales fell 2% for the most recent period, led by a 5% same-store sales decline
at KFC and a 4% drop at Pizza Hut. Taco Bell, however, posted 1% same-store sales growth for the quarter.
For the fourth quarter, Yum reported a profit of $321 million, or 70 cents a share, down from $337 million, or 72
cents a share, a year earlier. Excluding special items such as a tax benefit, pension settlements and other items,
adjusted earnings rose to 86 cents a share from 83 cents a share.
Revenue edged up 0.6% to $4.18 billion.
Analysts polled by Thomson Reuters were expecting per-share earnings of 80 cents on revenue of $4.26 billion.
Yum's world-wide restaurant margin declined to 14.2% from 14.4%, with the biggest decline coming from Yum
Restaurants International division.
Through Monday's close, the stock has edged up 0.4% in the last 12 months.
Write to Anna Prior at email@example.com
Corrections & Amplifications
This item was corrected at 11:32 a.m. ET on Tuesday, Feb. 4, 2014 to show that the month when Yum reported its fourth-
quarter same-store sales decline in China is January. The original incorrectly stated February.
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