Yum Brands (NYSE:YUM) on Wednesday reported mixed results for its fourth quarter as higher costs weighed on profits, leading to an earnings miss.
Yum reported fourth-quarter net income of $330 million, or $1.11 per share, down from $332 million, or $1.08 per share, a year earlier.
Excluding items, the company earned $1.02 per share, falling short of the $1.09 per share expected by analysts.
Taco Bell, KFC and Pizza Hut all saw company restaurant margins shrink during the quarter. Across the restaurant industry, operators have been dealing with higher food, freight and labour costs.
Net sales rose 8% to $1.89 billion, topping expectations of $1.88 billion. Yum reported same-store sales growth of 5% compared with the year-ago period and 4% on a two-year basis.
Taco Bell reported the highest jump in same-store sales growth of Yum’s portfolio. The Mexican-inspired chain saw its same-store sales climb 8% after several weaker quarters, hurt by a lack of late-night and morning customers.
KFC’s same-store sales rose 5% in the quarter. In the U.S., its second-largest market, same-store sales jumped 4%. Its domestic market accounts for less than a fifth of its system-wide sales.
Shrinking system-wide sales in China, its largest market, weighed on the chain’s overall same-store sales growth.
Pizza Hut reported same-store sales growth of 3%. The pizza chain’s U.S. same-store sales ticked up just 1% in the quarter as the market faced tough comparisons to last year’s same-store sales growth.
Yum shares flew $7.03, or 5.6%, to $132.00.
