Yum! Brands’ EPS Declined 6.5% in 1Q15



Earnings per share

Yum! Brands (YUM) released its first quarter earnings on April 21, 2015. The company reported adjusted EPS (earnings per share) of $0.85—a 6.5% decline compared to an adjusted EPS of $0.87 in the same quarter in 2014.

The company reported an operating income of $506 million. It declined by 11% from $571 million in the same quarter last year. However, its operating profit margins increased to 19.3% from 13.7% as a percentage of sales. We’ll discuss the financial performance in more detail later in this series.

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Company overview

Yum! Brands (YUM) owns three famous restaurant brands—Taco Bell, KFC (Kentucky Fried Chicken), and Pizza Hut. It also owns two lesser known brands—Little Sheep and East Dawning—in China. Yum! Brands operates more than 40,000 restaurants in over 125 countries.

According to IBISWorld, in 2014, Yum! Brands had the second largest market share of 11% in the US fast food industry after McDonald’s (MCD). McDonald’s had the largest share of 17% with 35,000 restaurants worldwide. Both of these restaurant stocks are part of the Consumer Discretionary Select Sector SPDR ETF (XLY). XLY also holds 1% of Chipotle Mexican Grill (CMG) and 3% of Starbucks (SBUX).

To learn more about the US restaurant industry, read An overview of the US restaurant industry.

Overview of this series

To understand growth or decline in EPS, we’ll look at revenue drivers—same-store sales growth and unit growth. We’ll also look at the earnings and strategic changes or tactics that management discussed during the earnings call in order to help investors better understand the company and make solid investment decisions.


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