Yum Brands (YUM) fell about 1% after hours even after beating earnings expectations and raising its full-year guidance.
The owner of KFC and Taco Bell posted 76 cents in EPS, 3 cents ahead of expectations. Revenue of $2.7 billion was in line with expectations. Worldwide operating profit jumped 15%, including 14% in China. Same store sales grew 5% in the U.S. and 14% in China. Overall restaurant margins grew to 18.6%, up 120 basis points. But Chinese margins fell 150 basis points to 23.6%.
“Restaurant margin decreased 1.5 percentage points to 23.6%, driven primarily by wage rate inflation of 17%. Commodity inflation was 10%.”
Earnings should grow at least 12% for the year, the company added.
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