Yum Brands Inc, the operator of the KFC and Pizza Hut fast-food chains, said fourth-quarter earnings rose 4.8 percent, helped by increased sales at the company's Taco Bell unit and from overseas.
Net income rose to US$172 million, or US$0.56 a share, from US$164 million, or US$0.54 a share a year earlier, the company said in a statement. Sales in the period ended Dec. 28 rose 12 percent to US$2.46 billion.
The company opened 457 stores internationally in the quarter, boosting sales 11 percent overseas. Sales were also helped by Taco Bell, which benefited from less competition in the Mexican fast-food segment as competitors including Burger King and McDonald's Corp try to boost business by cutting prices and increasing advertising.
"They have a little better growth prospects than some of the chains because they don't compete with the main chains, and have a huge opportunity for international growth," said Jonathan McAdams, an analyst at Aim Capital Management Inc, which has about 6 million Yum shares among its US$124 billion in assets under management.
The earnings were a cent more than the reduced average estimate of analysts surveyed by Thomson First Call. Analysts had lowered their estimates from US$0.58 a share after the company in October said it expected profit of US$0.54 to US$0.56 a share.
Sales in last year's fourth quarter were US$2.20 billion.
The company said it still expects first-quarter profit of US$0.38 a share, excluding a gain of US$0.02. Yum Brands also reiterated its annual earnings forecast of at least US$2 a share.
Sales at stores open at least a year rose 1 percent, helped by a 3 percent rise at Taco Bell. Sales at Pizza Hut rose 1 percent, while they fell 6 percent at KFC. Same-store sales are a key indicator of a restaurant's business because they exclude new and closed locations.
At Taco Bell, the chain has sped service and introduced more expensive items such as meal-in-a-bowl Border Bowls. The company is expected to add more menu items and continue testing the sale of french fries.
Yum has said it didn't anticipate the drop in sales at its KFC chain after rivals Domino's pizza and Papa John's advertised chicken products nationally in the US.
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