Yum Brands,owner of the KFC and Pizza Hut fast-food chains,raised its earnings per share outlook for next year by 12 per cent as the company booked its biggest quarterly profit rise in a year amid rapid growth in China.
Worldwide operating profit at Yum rose by 10 percent in the third quarter.The company said it was likely to exceed an earlier target for the full year of opening 1.100 restaurants globally.In China,which accounts for 6.3 per cent of Yum's global sales profits next year were expected to be 20 per cent higher than this year,said David Novak,chief executive.
Sales at Pizza Hut in China,where Yum recently opened its first pizza home delivery outlet in Shanghai,grew by 23 percent year-on-year.Yum expected to open more than 375 new KFC an Pizza Hut restaurants in the country next year,more than initially planned.
The strategy contrasts with that of rival Mc Donald's,whichh has since 2003 slowed the number of new restaurants openings in favour of concentrating on rebuilding its core business with new product offerings.Third quarter group net income at Yum rose 16 percent to $214 m,or 72 cents a share.
This was Yum's fourth straight year of double-digit earnings per share growth,sending its shares 3 percent higher in morning US trading to $ 49.80.Mr Novak said the group global business was providing some diversification in " challenging times " for the fast -food industry.
" I don't want to give you the impression (everything) is just perfect in our global portfolio,but I do want to point out a very good thing about our company.Having a global (presence) you don't have to be perfect everywhere " he told analysts.
He said same store sales next year should grow at 2-3 percent.Yum was likely to earn $ 2.64 per share next year,compared with $ 2.62 last time,excluding special items.This was in line with an earlier stated goal of at least 10 percent earnings per share growth.
Mr Novak said that in the US,higher petrol prices wer enot deterring consumers " We feel the strength of the brand enable us to overcome any consumer disposable income issues that may lie ahead."
Such comments contrasted with fortune at rival Wendy's,which yesterday cut its estimates for third-quarter earnings by 2 cents a share because of the impact on consumers of the recent US hurricanes.Same-store sales at Wendy's restaurants in the US fell by 5 percent in the third quarter.
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