Yum! Brands Q4 profit misses estimates, dividend up 6%

Overview

• Fast food chain's Q4 GAAP operating profit grew 12%, core profit up 11% excluding 53rd week

• Adjusted EPS for Q4 was $1.73, missing analyst expectations

• Company increased quarterly dividend by 6%

Outlook

• Company targets 5% unit growth over the long term

• Yum! Brands aims for 7% system sales growth excluding foreign exchange

• Company expects at least 8% core operating profit growth

Result Drivers

• TACO BELL GROWTH - Taco Bell's same-store sales grew 7% in Q4, contributing to the division's strong performance

• KFC EXPANSION - KFC achieved record development with over 1,100 new store builds in Q4

• DIGITAL SALES - Robust digital system sales exceeded $11 bln, with a digital mix nearly 60%

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 17 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for Yum! Brands Inc is $167.50, about 5.5% above its February 3 closing price of $158.74

• The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 21 three months ago

Press Release: ID:nBw1NKD7Ba

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