After the closing bell last night, fast-food restaurant operator YUM! Brands (NYSE: YUM) stepped into the earnings spotlight, reporting a first-quarter profit that dropped 14% compared to a year ago.
Nevertheless, the company's earnings of 46 cents per share topped the consensus estimate of 40 cents per share. The company's sales dropped by 8% to $2.2 billion, which was worse than Wall Street's expected $2.35 billion.
The company noted that gains in overseas markets were undermined a bit by currency losses and a decline in store traffic in the United States at the company's KFC and Pizza Hut restaurants.
During the quarter, YUM's U.S. same-store sales fell 2%. The firm holds some hope that this trend will reverse with the release of its Kentucky Grilled Chicken (KGC?). In China, same-store sales increased 2%, as YUM opened 98 new restaurants in China. This glut of openings brings the total number of KFC and Pizza Hut restaurants in China to 3,103.
Looking ahead, YUM forecast earnings of $2.10 per share for 2009. While YUM's competitors (namely Burger King, NYSE: BKC, and McDonald's, NYSE: MCD) have seen shares drop -- 25% and 12% respectively -- YUM has managed to see its stock increase 4%. That said, the stock is actually in position to close out April atop its 10- and 20-month moving averages. The last time YUM finished a month north of both of these trendlines was the middle of last year. Let's see how the stock reacts to this news. If the shares are going to run higher, they will have to overcome intermediate-term resistance at the $34 levels -- a level that acted as a ceiling earlier this year. Let's see if stronger-than-expected earnings can help the stock advance.
Looking ahead, YUM forecast earnings of $2.10 per share for 2009. While YUM's competitors (namely Burger King, NYSE: BKC, and McDonald's, NYSE: MCD) have seen shares drop -- 25% and 12% respectively -- YUM has managed to see its stock increase 4%. That said, the stock is actually in position to close out April atop its 10- and 20-month moving averages. The last time YUM finished a month north of both of these trendlines was the middle of last year. Let's see how the stock reacts to this news. If the shares are going to run higher, they will have to overcome intermediate-term resistance at the $34 levels -- a level that acted as a ceiling earlier this year. Let's see if stronger-than-expected earnings can help the stock advance.
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