Retailing, Franchising, and Consumerism Business Intelligence in China

China Pumps Up Yum! Results

Yum! Brands reported its results for the first quarter ended March 24, 2007, and the company saw 20% operating profit growth from China.

David C. Novak, chairman and CEO of the company, said, "In summary, we expect to once again beat our target of at least 10% EPS growth for the sixth straight year based on the strength of our unique global portfolio and continuing to execute our four key strategies: building dominant restaurant brands in China, driving profitable international growth, improving U.S. brand positioning and returns, and driving high ROIC and strong shareholder payout."

For the first quarter 2007, company sales for the China Division increased 18% in local-currency terms due to continued strong unit expansion of KFC and Pizza Hut in mainland China as well as strong same-store-sales growth in mainland China of 9%. The China Division restaurant margin improved 1.1%. China Division includes mainland China, Thailand and KFC Taiwan.

Going forward, the company's key metric is system sales growth and its target is 20% driven by 375 new restaurant openings.

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