Yum! Brands Inc. – the world’s largest restaurant company and owner of KFC, Pizza Hut and Taco Bell, among other brands – on Wednesday reported results for the fourth quarter and year ended 26 December 2009.
Among the full-year highlights:
- International development continued at a strong pace with 1,467 new restaurants including a record 509 new units in Mainland China and 898 new units in Yum! Restaurants International (YRI).
- Worldwide operating profit grew 9 percent prior to foreign currency translation, including growth of 23 percent in China, 5 percent in YRI and 1 percent in the US. After negative foreign currency translation, worldwide operating profit grew 6 percent.
- Worldwide restaurant margin improved by 1.7 percentage points, driven by China and the US.
"Given the tough macro environment, I am especially pleased to announce 2009 was another strong year of performance," said David C Novak, company Chairman and CEO. "We reported 13 percent EPS [earnings per share] growth, marking the eighth straight year that we exceeded our annual target of at least 10 percent growth and achieved at least 13 percent."
The company’s success in the past year came largely thanks to Asia, as Novak explains: "Our growth in 2009 was driven primarily by a record 509 new units in Mainland China and 898 new units in Yum! Restaurants International. At the same time, we invested heavily in our future growth drivers, including infrastructure in emerging markets and developing incremental sales layers that will make our unit economics even stronger over time.
"We are in the enviable position of having powerful brands and unmatched unit economics in China, as evidenced by KFC’s USD1.4 million average unit volumes and restaurant margins of over 20 percent. There is no question that we are in the early innings of profitable expansion in this massive and rapidly growing economy. We are also making progress creating major new growth vehicles by investing in India, Russia and France and beginning to develop Taco Bell into a truly global brand."
As for the year ahead, Novac says, "In 2010, we once again expect to achieve our annual target of at least 10 percent EPS growth. Our profitable international new unit development will be a key driver of our growth as we execute against our obvious short-term challenge of driving same-store-sales growth. I am confident that our teams around the world will continue to build on our track record of consistent double-digit EPS growth."