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.