Yum Brands (NYSE: YUM) outpaced analyst estimates on both the top and bottom line, but weakness at its KFC and Pizza Hut chains led to weaker-than-expected same-store sales growth.
In the quarter ended March 31, the company, which also owns Taco Bell, said net income rose to $433 million, or $1.27 per share, up from $280 million, or 77 cents per share, a year earlier.
Excluding items, the company earned 90 cents per share, better than the 68 cents per share analysts had expected.
The company's revenue fell 3% to $1.37 billion, compared with $1.42 billion last year. Wall Street had expected revenue to be $1.09 billion.
First-quarter adjusted earnings came in at 90 cents per share vs. 68 cents per share expected by experts.
Revenue was $1.37 billion vs. $1.09 billion expected. Overall same-store sales were up 1% vs. up 1.9%.
Same-store sales growth across all three brands grew 1% in the quarter, falling short of analyst expectations of 1.9%.
"As we begin the second full year of our transformation journey, I'm pleased with our progress towards becoming a more focused, more franchised and more efficient company," Greg Creed, CEO of Yum, said in a statement Wednesday.
With New Year 2018, YUM also adopted a new accounting standard on revenue recognition. As a result, it is are now recognizing upfront fees, such as initial and renewal fees it receives from franchisees, as revenue over the term of the related franchise agreement.
YUM Brands began Wednesday trading down $3.18, or 3.7%, to $83.45
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