Yum Brands (YUM) has reported a 2.91 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $267 million, or $0.05 a share in the quarter, compared with $275 million, or $0.03 a share for the same period last year.
Revenue during the quarter went up marginally by 2.43 percent to $2,024 million from $1,976 million in the previous year period. Gross margin for the quarter expanded 192 basis points over the previous year period to 46 percent. Total expenses were 75.84 percent of quarterly revenues, down from 78.29 percent for the same period last year. This has led to an improvement of 245 basis points in operating margin to 24.16 percent.
Operating income for the quarter was $489 million, compared with $429 million in the previous year period.
"2016 was a landmark year for Yum! Brands," said Greg Creed, chief executive officer. "Not only did we complete the spin-off of Yum China as an independent and powerful growth company, but we also launched a new multi-year strategic transformation of Yum! Brands. By being more focused, more franchised and more efficient, we will strengthen and grow our KFC, Pizza Hut and Taco Bell brands around the world, creating significant long-term value for all our stakeholders. I'm encouraged by strong fourth-quarter results and early progress on unlocking growth through our four key drivers: Distinctive, Relevant Brands; Unmatched Franchise Operating Capability; Bold Restaurant Development; and Unrivaled Culture and Talent."
Operating cash flow remains almost stable
Yum Brands has generated cash of $1,204 million from operating activities during the year, down 0.58 percent or $7 million, when compared with the last year.
The company has spent $24 million cash to meet investing activities during the year as against cash outgo of $189 million in the last year.
The company has spent $677 million cash to carry out financing activities during the year as against cash outgo of $1,056 million in the last year period.
Cash and cash equivalents stood at $812 million as on Dec. 31, 2016, up 143.11 percent or $478 million from $334 million on Dec. 26, 2015.
Debt increases substantially
Yum Brands has witnessed an increase in total debt over the last one year. It stood at $9,127 million as on Dec. 31, 2016, up 132.36 percent or $5,199 million from $3,928 million on Dec. 26, 2015.
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