Yum! Brands Inc. (YUM) will release their third-quarter earnings after the closing bell today. the company is expected to post increased earnings and revenue on the quarter. The company owns many major brands, including KFC, Taco Bell and Pizza Hut.
Things to know before the company releases their earnings are:
1. Revenue Expectations of $3.46 Billion
Analysts project that the company will post revenue of $3.46 billion on the quarter. Earnings per share are expected to reach $1.09. The forecasts outpace revenue and EPS in Q3 2015. The company posted revenue of $3.43 billion in Q3 2015 along with an EPS of $0.97.
2. Yum Brands Will Spin Off Its China Division
The stock is expected to remain turbulent going into the end of the month, as the company will spin off their Yum China division. The division will trade under the “YUMC” ticker. The company will complete the spin off on October 31.
The Chinese brand is expected to be a fast-growth company, while the Yum Brands division are expected to post slower growth.
Yum China is a risk for the company, and with uncertainty removed following the spin off, the stock is expected to remain stable as a result.
3. KFC and Pizza Hut Performed Well in the First Two Quarters
The company’s KFC and Pizza Hut brands both performed well during the first two quarters of the year. KFC has accounted for $1.3 billion in revenue since the start of the year, which accounts for 23% of the company’s revenue.
Pizza Hut has accounted for $511 million in revenue, or 9% of the company’s total revenue.
The brand has struggled to return consumer confidence, and same-store growth has remained flat, which is a concern. Taco Bell has brought in $889 million in the last two quarters despite flat same-store growth.
Lower costs have helped the company’s profit margins in 2016.
