Yum! Brands Inc. (YUM), the parent of the KFC, Taco Bell and Pizza Hut fast-food chains, reiterated its fiscal 2009 earnings per share growth forecast of 12%, excluding one-time items, helped by commodity deflation, lower effective tax rate and the addition of 1,400 new units in China and other international markets.
 
Louisville, Kentucky-based quick service restaurant operator also said that it expects comparable-store sales to fall 3% in mainland China, 1% in Yum Restaurants International (YRI) and 8% in the U.S in fourth-quarter 2009. 
 
For fiscal 2009, management expects system sales growth of 9% in mainland China and 5% in YRI (excluding foreign currency translation). Comparable-store sales are expected to drop 4% in the U.S.
 
Yum! expects the weak consumer environment to persist in fiscal 2010, and comparable-store sales to remain under pressure amid the economic downturn.
 
However, Yum! still anticipates a 10% rise in earnings per share in fiscal 2010 driven by unit expansion, effective cost management, modest sales growth and favorable foreign currency movement.
 
For fiscal 2010, management expects profit to climb, excluding foreign currency translation, 15% in mainland China, 10% in YRI and 5% in the U.S., and estimates 1,400 new international unit developments, including both YRI and China.
 
Yum! and other fast-food chains, such as Burger King Holdings (BKC), McDonald’s Corp. (MCD), and Chipotle Mexican Grill (CMG) are faring better than casual and upscale dining restaurants, as budget-constrained consumers are trending towards lower-priced dining options.
 
The company operates more than 36,000 restaurants units in over 110 countries and territories.
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