Based on its latest earnings, Yum! Brands Inc. (NYSE: YUM) did well in the United States and China, its big growth markets. Or, China is a problem because growth has slowed there. The Yum! Brands results provide another example of why Wall St. has such difficulty dissecting how much China, the U.S. or Europe will or will not hurt corporate earnings.
Yum! Brands issues what may be the most unnecessarily complex financial statements of any large company in America. Buried in the data were numbers that showed that U.S. sales were up 1% and China’s up 22%, but margins in China did not improve while operating profit in the region was up 24% to $374 million. Additionally:
China Division system sales increased 22%, prior to foreign currency translation. Same-store sales increased 6%, overlapping strong prior year same-store sales growth of 19%.
Maybe sales are good, or same-store sales are slowing, or…
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