Yum Brands ends 2019 strong, but China virus could cut sales

Business

FILE In this Jan. 31, 2014 file photo, a KFC sign hangs in Saugus, Mass. KFC owner Yum Brands ended 2019 with better-than-expected sales, but the impact of the new virus in China could weigh heavily on its first quarter results. Yum said fourth quarter revenue rose 9% to $1.7 billion. (AP Photo/Elise Amendola, File)

KFC owner Yum Brands ended 2019 with better-than-expected sales, but the impact of the new virus in China could weigh heavily on its first quarter results.

Yum has a strong presence in China, which makes up 27% of KFC’s sales and 17% of Pizza Hut’s sales.

Yum shares fell more than 2% to $104.49 per share in premarket trading as investors waited for more news from the company about its Chinese stores.

Yum said Thursdsay that fourth-quarter revenue rose 9% to $1.69 billion. That beat Wall Street’s forecast of $1.65 billion, according to analysts polled by FactSet.

Yum, based in Louisville, Kentucky, reported net income of $488 million, or $1.58 per share. Excluding one-time items, the company earned $1 per share, which fell short of Wall Street’s forecast for $1.13.

Yum was stung by a change in the value of its investment in food delivery company GrubHub, which shaved 5 cents off its fourth-quarter earnings per share. Yum bought a stake in GrubHub for $200 million in 2018, but the platform has been struggling in the increasingly competitive food delivery market.

Same-store sales, or sales at stores open at least a year, rose 2% for the fourth quarter. That was in line with Wall Street’s forecast.

For the full year, same-store sales growth rose 3%. Taco Bell led with 5% growth, KFC’s sales rose 4% and Pizza Hut’s sales were flat. KFC ended 2019 with more than 50,000 restaurants worldwide.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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