Yum Brands beats on earnings, raises guidance

Yum Brands reported second-quarter earnings that topped forecasts, and sales that missed expectations, after the market close on Wednesday.

The company, which operates fast-food brands including KFC and Taco Bell, reported $0.75 in adjusted earnings per share (EPS), on revenues of $3.01 billion.

It boosted its core operating profit growth guidance to at least 14%.

Analysts had forecast that it earned $0.74 in adjusted earnings per share on revenues of $3.09 billion, according to Bloomberg.

The company’s shares rose about 1% in after-hours trading.

Analysts are again focusing on how the restaurants performed in China, where sales slowed recently. Bloomberg Intelligence analysts noted that the second quarter is usually the toughest of the year in China, because some sales are lost to the first quarter due to the Chinese New Year.

The company last year announced it was splitting into two public companies. Yum China would become a franchise in mainland China, with exclusive rights to KFC, Pizza Hut and Taco Bell. And, Yum Brands would expand the three franchises around the world.

The company expects the split to be completed by the end of October.

Yum Brands shares had rallied about 17% this year through the market close on Wednesday.

More to come …

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