Yum! Brands, Inc (YUM) has reported a 23.08 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $280 million, or $0.77 a share in the quarter, compared with $364 million, or $0.87 a share for the same period last year. Revenue during the quarter went down marginally by 1.80 percent to $1,417 million from $1,443 million in the previous year period. Gross margin for the quarter expanded 229 basis points over the previous year period to 46.51 percent. Total expenses were 65.84 percent of quarterly revenues, down from 75.81 percent for the same period last year. This has led to an improvement of 997 basis points in operating margin to 34.16 percent.
Operating income for the quarter was $484 million, compared with $349 million in the previous year period.
Greg Creed, chief executive officer, said “Our strategic transformation of Yum! Brands is already well underway, helping us deliver a solid start to 2017 with core operating profit growth of 9% in the first quarter. This growth was led by Taco Bell’s impressive same-store sales growth of 8% and double-digit core operating profit growth at KFC, partially offset by weakness at Pizza Hut U.S. We remain confident that our multi-year strategy to be more focused, more franchised and more efficient will further strengthen our brands, accelerate growth, increase consistency in our results and increase capital returns.”
Operating cash flow declines
Yum! Brands, Inc has generated cash of $288 million from operating activities during the quarter, down 6.80 percent or $ 21 million, when compared with the last year period. Cash flow from investing activities was $104 million for the quarter as against cash outgo of $67 million in the last year period.
The company has spent $629 million cash to carry out financing activities during the quarter as against cash outgo of $378 million in the last year period.
Cash and cash equivalents stood at $611 million as on Mar. 31, 2017, up 180.28 percent or $393 million from $218 million on Mar. 31, 2016.
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