Pizza Hut Sales Unexpectedly Fall

Yum Brands reported Q2 earnings of $US0.73 per share, on revenue of $US3.2 billion in line with expectations.

Yum saw China comparable store sales up 15%, beating expectations for an 11.4% rise.

Pizza Hut comp sales were down 3%, missing expectations for 0.1% growth.

Taco Bell comp sales were up 2%, missing expectations for 3.6% growth.

“Yum! Brands is well on its way to delivering full-year EPS growth of at least 20%, with second-quarter EPS growth of 30%,” CEO David Novak said in a press release. “Operating profit grew 188% in China driven by strong sales and margin performance. Just as important, I’m confident we are building momentum behind major initiatives around the world that will sustain double-digit EPS growth in 2015 and beyond.”

Yum derives a large part of its revenue from China, so investors watch for clues on the health of the Chinese consumer.

“I think the economy is still in a recovery,” Jonathan Blum, chief public affairs officer for Yum told Business Insider. He pointed out that sales were positive at Taco Bell and less positive at Pizza Hut and reiterated that “the economy is still in a recovery mode.”

The stock is down 3% after hours.

More to come…

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