Yum Brands 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

China growth strong

“Our China Division delivered system sales growth of 21% in the quarter as we opened 104 new units and grew same store sales 15%. It’s great to see such a strong top line growth. And fortunately this top line growth flow through nicely to the bottom line as operating profit grew an impressive 188%. The China team deserved the lot of credit for doing an excellent job driving restaurant margins of almost 17% during the quarter and over 19% in the first half.”

two restaurants per million people in EM vs 58 per million in US

“We have only two restaurants per million people in emerging market compared to 58 per million people in the United States today. ”

Cash payback times for new restaurantsPleased with Taco Bell performance in breakfast

“Remember, I took that thing for McDonald eight years to make money in breakfast. We are already at above breakeven. So we feel good about get $70,000 to $120,000 in sales per unit on annual basis. So this is a great vehicle for us. And I think this category is very tough. You got to have constant innovation and to be able to innovate across all the important day parts to drive the same store sales versus just the traditional lunch and dinner day part. I think it gives an opportunity to even bring more consumer news, more excitement to the Taco Bell brand as we go forward. And regardless of what we market and how we market it, if you look at what we are doing it all drives the Taco Bell brand forward. “