Yum! Brands Inc. Reports Second Quarter 2010 EPS Growth of 17 Percent; Raises Full Year 2010 EPS Growth to 12 Percent

LOUISVILLE, Ky.--(BUSINESS WIRE)--Yum! Brands Inc. (NYSE: YUM) today reported results for the second quarter ended June 12, 2010.

Earnings Per Share (EPS) was $0.58, excluding special items, representing a 17 percent growth. On a reported basis, EPS was $0.59 or 6 percent below last year because the company lapped a one-time gain of $68 million arising from the acquisition of additional ownership in, and consolidation of, the operating entity that owns the KFC business in Shanghai, China in the second quarter of 2009.

SECOND-QUARTER HIGHLIGHTS

    * Worldwide operating profit grew 21 percent prior to foreign currency translation, including 33 percent in China, 10 percent in the U.S., and 7 percent in YRI.

    * Worldwide system sales growth prior to foreign currency translation of +4 percent including +5 percent in China, +4 percent in YRI, and one percent in the U.S.

    * Worldwide restaurant margin improvement of over one percentage point driven by China and the U.S.

    * Share repurchases totaled $115 million for 2.8 million shares at an average price of $40 per share.

FULL YEAR OUTLOOK

The Company raised its full-year 2010 EPS forecast from $2.39 to $2.43 per share or 12 percent growth prior to special items, based on strong first half performance.

David C. Novak, Chairman and CEO said, “We are also pleased to report 10 percent operating profit growth in the U.S., despite flat same-store-sales. Our primary focus is to drive same-store-sales growth during the balance of year given the challenging consumer environment. At Yum! Restaurants International, we increased system sales by 4 percent prior to foreign currency translation benefit. We expect stronger sales and profit growth for the balance of the year at YRI."

“Overall, we are encouraged with our strong performance in a difficult macro-economic environment. Longer term, we continue to drive aggressive, international expansion while maintaining our industry-leading return on invested capital as we provide cash to shareholders through dividends and share repurchases.”