Despite the sales growth, the company says its expectsfirst quarter earnings per share in the range of 51cents to 52 cents because of higher costs and taxes.The EPS translates into 9% to 11% growth. According toThomson First Call, Wall Street was looking forearnings of 51 cents per share.
Results from Yum! Brands China Division, whichincludes Mainland China, Thailand and KFC Taiwan, were favorably impacted by the Chinese New Year, the company says. In contrast, the Division was hurt by a supplier problem that necessitated the temporary withdrawal of several products. The company says the problem has been resolved, and the products are back on the menu. Moreover, Yum! Brands believes that the bad publicity and negative sales will not have a material impact on earnings.
Yum! Brands annual target growth rate for ChinaDivision is at least a 22% increase in sales overprior periods. The Division currently has 1,416restaurants in Mainland China, 358 restaurants inThailand and 131 KFC restaurants in Taiwan.
Yum! operates more than 33,000 restaurants in over 100 countries and territories under the KFC, Long John Silver's, Pizza Hut and Taco Bell brand names.
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