Yum! Brands, Inc. (NYSE: YUM) reported its second-quarter financial results Tuesday after the market closed. The company had $0.69 in earnings per share (EPS) on $3.11 in revenue versus Thomson Reuters consensus estimates of $0.63 in EPS on $3.19 billion in revenue. The same period from the previous year had $0.73 in EPS on $3.20 billion in revenue.

Once again, Yum’s earnings report is more than just a little complicated.

Total international development was 291 new restaurants; 75% of this development occurred in emerging markets.

The company highlighted a few points in its earnings report:

• KFC Division system sales increased 6%, driven by 2% unit growth and 3% same-store sales growth. Operating margin increased 1.3 percentage points to 21.9%. Operating profit increased 10%.
• Pizza Hut Division system sales increased 1%, driven by 2% unit growth. Same-store sales were even. Operating margin decreased 0.9 percentage points to 22.6%. Operating profit decreased 1%.
• Taco Bell Division system sales increased 9%, driven by 3% unit growth and 6% same-store sales growth. Operating margin increased 4.7 percentage points to 29.5%. Operating profit increased 29%.

24/7 Wall St would draw attention to the point that this is a complicated report to interpret in system sales versus store sales. In the operating results segment of the report we found the following figures:

• The KFC division’s operating results show a drop of 9.4% in sales to $505 million from the same period of the previous year which had $558 million. Operating profit dropped to $152 million from $155 million.
• The Pizza Hut division’s operating results showed an increase of 2.1% in sales to $145 million from $142 million. Operating profit dropped to $60 million from $63 million.
• The Taco Bell division’s operating results showed an increase in sales of 8.2% to $370 million from $342 million. At the same time operating profit increased to $140 million from $109 million.

The company also said that during this quarter foreign exchange rates negatively impacted operating profit by $22 million.

Greg Creed, CEO of Yum, commented on earnings:

I’m pleased with the continued progress we are making in China, as well as the performance from our Taco Bell and KFC Divisions. I’m confident we will deliver full-year EPS growth of at least 10%, driven by a strong second half in China and solid brand-building initiatives underway at each of our divisions…

Internationally, we’re on pace to set a new record this year by opening 2,100 new restaurants, extending our lead in emerging markets. All of this should help us to achieve double-digit earnings growth this year, despite ongoing headwinds from foreign currency translation.

At the end of the second quarter the company had cash and cash equivalents of $636 million, up from $578 million at the end of 2014.

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Shares of Yum closed Tuesday up 1.0% at $91.99. Following the release of the earnings report, shares were down 0.9% at $91.20 in the after-hours trading session. The stock has a consensus analyst price target of $93.47 and a 52-week trading range of $65.81 to $95.90.

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