Yum! Brands (NYSE: YUM), the parent company of the fast food chains Pizza Hut, Kentucky Fried Chicken and Taco Bell, reported its third quarter results after Wednesday’s market close.
Yum Brands said that it earned $1.09 per share in the third quarter on revenue of $3.316 billion. Wall Street analysts were expecting the company to earn $1.10 per share on revenue of $3.49 billion.
Same-store sales for the entire company rose by 1 percent. By segment, China Division same-store sales fell 1 percent. Outside of China, the KFC division recorded a same store sales growth of 4 percent, Pizza Hut fell 1 percent and Taco Bell rose 3 percent.
Net income for the quarter rose to $622 million from $421 million in the same quarter a year ago.
Yum Brands also offered an update to its proposed spin-off its operations in China. The new company, called Yum China Holdings, is expected to begin trading for the first time on the New York Stock Exchange on November 1 under the ticker “YUMC.”
The company also discussed challenges it faced in China during the quarter.
Yum Brands said that sales started off on a good note in the first six weeks of the third quarter in China. However, the company noted that tougher comparisons in the second half of the third quarter were merely added an international court ruling on claims regarding the South China Sea which resulted in regional protests in addition to a negative sentiment against iconic Western brands.
“If not for this event, we believe the China Division would have delivered its fifth consecutive quarter of positive same-store sales growth,” the company’s CEO Greg Creed said in the company’s earnings release. “The good news is the incident was short-lived and the sales impact continued to dissipate through August and September. Despite the protests, Pizza Hut Casual Dining continued its trend of quarterly sequential improvement.”
Finally, the company also noted that it took on $4.6 billion worth of new debt during the third quarter. Year-to-date, the company also bought back 54.5 million shares of its own stock for a total of $4.5 billion at an average price of $82 per share.
The company’s shareholder friendly policies may have contributed to the stock’s strong performance since the start of 2016 as it is higher by more than 20 percent.