YUM - Earnings call transcript Q1 2019

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Yum! Brands First Quarter 2019 Earnings Release Call. At this time, all participants have been placed in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. you. Thank my President, the and Investor now Keith over Treasurer. to Vice Siegner, Relations, pleasure is call turn to It Corporate Strategy Please sir. go ahead,

Keith Siegner

for Financial call and Operator. us. our our Vice President, you, Good President Officer, everyone, Corporate Dave Gibbs, thank Thank and Russell, Operating Chief Senior morning, CEO; David On and are today you our Chief Greg Officer; Creed, Controller. and joining our

and Greg we'll the David, questions. Following remarks from call open to

this like I'd includes to started, conference get that call statements. you we Before forward-looking remind

Forward-looking cause included subject in forward-looking statements conjunction to our in those differ that statements in future are the cautionary Factors All events our materially our filings with uncertainties earnings and statements statements. to considered the could should release be actual SEC. and results with Risk from the

to Please the refer disclosures to SEC earnings call. that may on our with for presentation relevant be non-GAAP numbers releases our find filings our today's sections financial note please used addition, following call. In regarding of basis the of and of reconciliations in today's

all the foreign impact sales exclude First, currency. of results system

and our Hut Telepizza. sales increase the worldwide in Telepizza in base. growth quarter the year in sales related new unit and division with growth of include units Pizza Second, fourth XXXX inclusion of of the strategic net alliance the to benefit system reflects Same-store the prior

adopted standard prospectively the foreign and currency was Fourth, January of lease figures impact core operating profit accounting exclude growth Third, special items. X, the on XXXX.

is it week. results a this in please not also a on change And our balance of of being last, conference call and lease our liabilities the recording. like operating question note a change. XXrd that advised to this in our that aware the GAAP will any Events. the the will restricted Please cash live statement following Investor XX-Q change Yum! will XXXX at both a time or recognition make of group if the in did We filing. flows assets be broadcasting pertaining of via reminder, outstanding conference you We'd required income upcoming This call as As in this recorded you to resulting changes website. ask our for is capital a be to the playback. result of in structure Form be and sheet. include We're debt be available and expect will in included use provided Disclosures accounting future

XXXX, on be the Second day. quarter X, conference August earnings XXXX will with same released on the call

Greg to it like Creed. I'd over turn Mr. to Now,

Greg Creed

everyone. Keith, you, and good Thank morning,

of on the third growth X% start new increased This unrivaled and pleased quarter X% four strong including continue report our Yum! culture the marks first with a to growth quarter X% system collaboration sales We're the year, our growth. and transformation our start net system in of growth the Focus to and fuel year Brands. unit final sales to drivers these results. of

include for XX% year. growth well markets, with coupled or key and a sales as UK in way unmatched of bold was provide Africa, well was And growth will value As and driven Japan sales I'll with pack unrivaled strong walk and grew value on notice discuss brands. restaurant of our Innovation. as double-digit brands RED innovation X%. sales by value innovation an strength and widespread led promotions capability. as and as sales give Internationally global easy, powerhouse the growth new Australia, well-received on-the-bone same-store delivered the our counterbalanced division there drivers. short consistent our begin a Then, working value through and relevant, the lens system update the This KFC growth Japan, came growth combined value David, dual some Africa will distribution driven as we and the standout details, with streetwise four sales by result I X%, sandwich. with chutney of these as same-store lunch coupled usual, growth performances innovative Zinger well and Big share Combo development unit Honey of David core XX% franchise net I'll distinctive back In quarter talent. Indonesia the X%, three say with as value for same-store an news. well the RED Japan's as Box deals operating you quarter, Hot themes together. culture the growth from And Australia' mix the sales of lapping on layer as and innovation. the Indonesia, and XX% as Superstar China. tailwind same-store larger of where and Indonesia’s in sales each disruption by first with such same-store you'll call-outs the of I are with same-store growth. last some product Chicken saw X%

Importantly these while this markets sales strong growth. same-store development maintain momentum generating in

have excited and such meal in first We family We're look growth year. and menu check Grubhub forward of operational options restaurants a then our KFC just grew offering quarter a value to X,XXX drove a with about new chicken followed click-and-collect through introducing design the the $X build on same-store Carte We Operational now marketplace. X%. offers started our KFC the Grubhub items by contributed $XX sales. delivery for increased offering littles up both for to offerings. menu for ease available Channel franchisees as $X We sales we and launch their the Famous and two the Bowls positively focus the own allowed U.S. the continued Now where meals. KFCs original transactions Ala for for delivery and with fill-up year in for the new enhancements this and and new off later this on the X,XXX board flexibility nationwide U.S. quarter to delivery $X. customers Both each

its Lastly, of and KFC lab. from marketing distinctive the truly innovations breakthrough KFC campaign continued

our system Moving decline continue onto from U.S. base a asset two transform drive our line-up declined the teammate knots, division. line-up pipeline of continued deal to to to great and March, value topping flat Hut due our to compelling $X provides garlic The were a In our the for we and provide unit with mini-rolls sales at $X and topping a future ensuring innovation X% In off-premise traffic by our accessible sales as is pepperoni line-up. to X% pizza, large product dining focused $X.XX a price. medium and like to a features Pizza one U.S. new which Pizza helped new wings, Hut the cinnabon innovation. net assets. added we best favorites same-store Pizza customers pizza maintaining

on the the continued to enhance we offerings, mind, our marketplace. slow the the our U.S. reposition succeed. to first steps Grubhub Grubhub update for and operations international assets, encouraged build we've growth messaging help partnership for base distinctive. opportunity reiterate locations Pizza We over ended an and about marketplace and the Hut. and to as channel businesses, and remain in the a in improve the provide additional the quarter make with sales value XXX as As franchisees Grubhub With the we're with leverage more that excited we've sustainable taken both improvements to will asset sales by We're

customers website, Hut completing the drivers are placing the While Pizza Grubhub on delivery orders are the orders.

We Malaysia, Hut flat. Pizza last quarter a same-store Hong the from were sales of were see while sales sales units growth grew and International. in places Indonesia, including Kong. XX% of onto like the the to same-store System Now year, benefit in in Telepizza addition QX pleased

strong In we one Malaysia express Delcos, in to As asset including regards offering to Delcos, development, get and at sales fast continue find delivered example, their success promotion. same-store value X% off-premise a casual dominant growth one one buy our I units. focused very options with

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our famous a came quarter by back the fries bit season was Our offering a jalapeño fries, yet then marinated off keep a signature time introducing limited We popular with one in for contained rattlesnake of time four again orders for with new again so Fries and that finished Nacho steak that creamy steak fries. sauce. limited strong

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talent. Now to and unrivaled culture

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David Gibbs

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reminder, disruptions X% our basis thereby negative distribution impact in the full-year. having in second quarter, QX by for was XX a profit for our core growth sales that QX KFC at the are both points and for the XXXX. the impact quarter, was and impacted XXXX points same-store growth KFC of quarter business estimated UK the estimated We negatively in full-year Additionally, XX first a we XXXX lapping and X% consolidated for KFC for As results first basis operating X% X% Yum! on KFC negative

For quarter, Yum! first the core second impact for was and for the operating profit, the the X% X% full-year. quarter, X% for

like algorithm. to our growth I'd Now remain guidance. our in discuss long-term We confident

algorithm profit a result high-single-digit slightly it growth in is to of growth above XXXX; three for and primarily factors. upside of low-double-digits core pertains longer-term beyond. full-year This operating XXXX specifically As our guidance our is

in on pieces adjusted impact table now the our and all EPS recovery release. agreement the UK will acceleration the of U.S. the outlook results discussed. our just I'll Hut First Pizza roll-off business media as roll-off the is update transformation in guidance, the we of a within and that spending related KFC of expected to reported of EPS moving earnings agreement; outlined you which versus second, XXXX special the the KFC expenses; our third,

XXXX change goal no introduced deliver First, least EPS in there to adjusted is in which XXXX. we at to $X.XX our

$X.XX. in Second, the rates, losses and benefit estimated FX excludes as XXrd a be impact We of week investment. XXXX, reminder in the $X.XX or $X.XX approximately any on XXXX with of the the any Grubhub changes special to the top items, from the our and guidance XXrd gains any week to of benefit associated

headwind This forecasts FX based time. since is Our vary against of is in rate will updated us to estimate This currency impact moved the of of headwind movements which current estimated forward October local the undoubtedly $X.XX the rates XXXX. guidance remains over applying original rates we to have $X.XX. provided because on

First XXXX these guidance least respectively. $X.XX $X.XX and are tailwind Grubhub is items release, $X.XX. GAAP our items EPS outlined at in to mark-to-market account $X.XX headwind are adjusted as quarter to adjustments quarter special earnings least figure into the $X.XX the at of Taking equivalent our XXXX first

plans XXXX, and franchise, order With more at shareholders. deliver of track. we focus of transformation was franchise on been G&A drivers our fourth growth in we quarter focused, update growth for everything sales the target X.X% and on having system to with remains to our this In more first our I'll appropriate do, more least the initiatives efficient to to the more in and on summary, heart be the to four XX% reached remain of more efficient. turning you mix be consistently Now at our in of quarter our XXXX. target

units CapEx, franchisees. potential As like new number positive incremental targeted we now elaborate thinking of discussed fund run would for shareholders including create run of refranchising rate comparable to it growth for our at I'd XXXX and on through updates. value additional and of CapEx, to rate Investor strategic for units, investments that spur a two we buckets equity outside that in three would our Day

strong excess increase overall opportunities given to attractive First, on of generate a see remains unit in builds, incremental our growth returns. increase equity corresponding unchanged. we count Again spur will to equity unit so units development units new returns and equity refranchised, additional number these by funded be the

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of base now $XXX gross estimate CapEx tech drive higher of course our for million gross CapEx equity XXXX these strategic Now inclusive builds, in near-term initiatives new approximately CapEx, and will and be will we investments projects.

and To shareholders. base and approach, the on investments level depending we both XXX% be measured partners in we're few could growth franchise meaning through However basis exceed benefit Please amortization closer does CapEx proceeds higher collect million incremental may we've XXXX trailing $XXX our on our refranchising for absolute by CapEx include or of conversion push that related discussed. net enhance slightly clear, cash flow can of from to believe to and previous value estimate years a note over than outlook excited we a gross creation depreciation beyond we the previously net on below recent initiatives. a next is CapEx this free spend only refranchising given which our as of proceeds, and that year. certain returns consequence One a timing small our

on goal billion period capital through $X.X As the of to XXXX firmly shareholders return to over capital three-year $X XXXX for remains return track. to billion plans, our

$XXX first million for of of have $X.X an we repurchased returned at years million quarter, billion $XX. shares with X.X During dividends, we over When this program. combined in average two price already the

beginning unmatched our Taco franchise Bell. let's capability. drivers, Now with growth operating discuss start with I'll

I of are had all for XXXX their U.S. simply from to growth franchise by is In over like opportunity franchise obsession all attend friendly customers enthusiasm exactly recently friendliness the operating partners. franchisees service the and Owners to As our spirit, two the mindset where fast these brand. powerful truly Franchise the to employees positive share their and regards and of initiatives, Forum managers, our their satisfaction so spirit, not impressed because the restaurant efficiency. customer about that This this and this why like and all by is year-over-year. partners, increased world-class initiatives speed points efforts by I'm

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scale proven Fridays. on best show board are ideas we and the global the examples to share adopt Fast across tours best leveraging sharing practices and of improvements kitchen these as ideas. how seen and open our Each such have We

Next to bold development. restaurant

our the units. units. net for quarter, track in into represents new increasing step-up keeping new historical us consecutive the unit development XXXX XXXX strong continued net This net trends from During openings. rates, be with KFC, recent new fourth of a to opened At development year on we XXX XXX

at the We the China, for are in continued Latin and in opened positive seeing U.S., In opened Bell continue new the U.S. while we strive cash-on-cash urban continue we Russia, Bell quarter restaurants including where our Asia, We Japan, and units quarter. to markets Diego time during the India completed strong in country Image. Internationally, our American to as the Among with closed during competitors. Taco XX out grow Showman continue four the transform in to unit to were see with asset closest XX American and San America, over X,XXX restaurants remodels Cantina and momentum XX and units net quarter. the formats returns the U.S. across to and base growth, same in new outperforming York Thailand, such the we new Caribbean. the the asset those Taco net New Showman as UK.

great with I with international Lastly, update to give start our on complete. tasks transition is Telepizza. an to want integration growth largely our alliance The off a

the we're converting their closely Specifically, period positive for franchisees Telepizza Pizza and has unit Pizza Further integrating brand. the and new net worked has intense begun Hut growth systems. transferring on into most reported Hut during Telepizza pleased units even Telepizza to integration,

scale pleased anticipate as still first may of have though set iconic expanding over was reminder, technology. We're business remainder future year. us they restaurants XX,XXX diversified due with our growth that between leading throughout and for thus overlap summarize, Yum! well-positioned of updating we units category to economics, quarter franchise to digital brands three included while up you XXX leveraging of XXXX. commitments. close occurred over time and to deliver half first uniquely the We results our [indiscernible] global the expectations with To closures forward on the consistent is far. improve a which to look massive and minimal the our XXX accelerate unit and these The the As

questions. your take to happy are I and team the Now

Operator

for is floor Instructions]. [Operator you. Thank now questions. The open

comes John of Morgan line first Glass the Our Stanley. of from question

John Glass

to the incremental expect or and from CapEx what to gross expect are? the do something year going you is and little the returns you those between capital back could franchisee that difference be, very And -- thanks incremental can describe because increases Thanks. just and you're to David, much. potentially capital of year just and be do a bit an this net to you metric Hi, what that just would helpful. contribute if pay and you next go clarify the capital That more what get nature fee. technology would investments

David Gibbs

I also about this what talked We of bit million the increase that CapEx John. the contemplating of to that good and a to more presented were and our when rate shareholder and out. run at strength capital Day, $XXX That's equity improve little pretty development Sure, we we seeing playing Investor business. the opportunities further value invest create in were noted much how this an is

rate million comparable changed. -- really a be original our which the number equity of more that all all $XXX little a interest What's So in of refranchising hasn't run for will generated the of units, capital be units. changed will is by capital bit building

than a such In it a that to a that We money we costs store store. it's get when this sell and build the fact math value more is is enhancing on new such why great shareholder move.

new time So we a we and every more or million it to might get store a on a $X.X build $X.X sell like less average store. million costs

sort there stores. we're equity Bell do development of the own opportunity decent an amount particularly help a arbitrage So certain Taco in of where spur we with parts country seeing to of

stores are them. worth what a in visiting where paid new more the great couple than best in substantially build opened York those of Some I City New those some of your of ago was to examples Taco weeks Bell's that are we backyard have

maybe were equity more stores to original build going this year only So XX XX. XX probably build when to plans five to we're the

So acquisition strategic where then looking that's has in worked at fourth other of driving for bought provider CapEx. we just of you the incredibly on incremental out quarter Hut can the the in QuickOrder tell Pizza investments, well. but And we things one we're I of quarter equation like some we're side on e-commerce recent the which the the announced

and for are platform left the franchisees over to Pizza Hut control owning past through lot us along they the companies. made contingency year, on then to there's ability we that in to Just some was follow-on of capitalized has Hut purchase franchise Hut tech now with actually really just significant about purchase there example, the excited platform, some a to on having convention Pizza But this QuickOrder CapEx making real that about the that Pizza is G&A their future. more this create some investments investment talking a tech I QX. enhancements go there and weekend, price comes time investment in and and our It

So we of is, John, on recovering start cost are lot them customers, say our Again show for The franchise investment good platforms great is these franchisees franchisees, some noted, going is -- of is of best that of to to our give lot our which platforms. to community service our and our going the for recover that for is for the that technology is a to a access you up but CapEx we why commitment to this shareholders. the we're as the pay news line. our at through these best price you'll these us see fees

due rate break excess about we that gross So that million before quoted if had $XXX $XXX due equity of that is and is down run the half to technology and to of strategic half the you the above investments. million development

Keith Siegner

Thank you.

Next question.

Operator

Our next of question from comes Brian line Oppenheimer. the Bittner of

Brian Bittner

and is. really and for X% Yum! Thanks. issues you you more figure bit now. initiatives a also seeing the outside you've couple more U.S. how here of in a U.S. want heard out sustainable I impressive consumer from about by for comp, prepared the into about couple this drivers inflection we KFC, really to drive driven start But this such week. remarks to that to Are really starting inflect lapping talk to a the your China strength. momentum of trying international it and UK happened I'm it Good you incremental an drove morning. outside little now and your about delivery some why the talked years is Greg,

other any to KFC that color you add Just can momentum?

Greg Creed

Brian. sure, Yes,

we fundamentally focus I really, on Relevant, with RED, our starts what it Distinct. and call think Easy,

they more teams, more KFC the making sure are with more meet relevant, easy, it's and is world and the amazingly KFC travel the brand distinct. I on focused As

not good markets, laser we on distinct. and delivers each as on not and relevant some making Brand that RED. as may KFC we got as in Now just others and like distinctive as absolute But we they're go go the as as each focus that sure country fact in think relevant good I

I certainly think that's helping.

I and like that run, like which did food I relevant. sound U.S. a the think it's that distinctive simple for value as secondly, in pound prepared I communication. may $X think remarks, say of both the It's KFC

click-and-collect that's We're So the also occurring. forms form and existing seeing of delivery you innovation, delivery this U.S. excited accelerate is we'll that's the got later as and in Brian, innovation in obviously a innovation said, rightly flavor and muscle new that. do And equally think what we've done then, put just will year great, marketing which Bell lot I which behind on has effort think that happening. we innovation great Taco we're we

contribution there's -- well; well; doing growing value and it's So delivery. incredibly incredibly incredibly really a It no from well; silver RED bullet. innovation is

the that's of very all is why remain we going and KFC think brand. that sustainable I forward positive about

Operator

Bernstein. from of comes the question next of Senatore Our Sara line

Sara Senatore

what -- I sounds Pizza you sort is some go. kind of when at you. to seeing is so terms so the extent it state trying the the that that aggregators trying repositioning base I Pizza -- One is a Grub sort of a given out it about itself even the for where question. category much But of App, there figure orders is is known understand, question customers restaurants quite you guess delivery business so thank as I was And business I comps. to repositioning to be on that of away the the implication softer U.S. taking of terms might you're in through I are Hut muted is from I'm time carry Thanks. know out we've you're have in I'm Pizza, growth is find assume that's the about other Hut I Pizza long. Grub guess and versus And Pizza are that dine-in that when I a Grub a the think had to has incremental? of that related and happening but still different just a scenario what the a Great, then the State are it's two-part to Hut heard well for question and a delivering like still customer bit very

Greg Creed

Sure. the brand sales Well growth in is obviously to we do continue on much have with. headwind is I better just job that Pizza points dine-in Hut a lag that that and think between and and fundamentals. that particularly doing the a to by I the seven the on-premise internationally foundations off-premise work the so U.S. say does or at

delivery his getting times remarks, As David pointed are temperatures out improving, lower. in prepared

that great regard is think $X to obviously support at on I think got Pizza to of With Hut, sustaining it's $X sustain think and line-up. effect in see we've there's of all negative the I value, but will is what Pizzone cannibalization the it's to -- franchisee obviously I measure out later your category. both obviously will aggregators Pizza we're so innovation that continue working, on which I is think on to aggregators, impact the hard and year. you Adding the and great question a help play

going and there's Taco for billion is the business time, we're delivery to XX% what's same KFC Pizza growing still Pizza $XX of $XXX is a at leverage better. non-Pizza It's in exciting Bell that in the take market for worth U.S. to billion. delivery I now advantage Hut opportunity. about and that to the But us the do think huge we think obviously at opportunity

So, a obviously growth delivery I massive for business. excited the an the upside got our come a at Hut the not be only impact business marketplace. negative. about us And of is still But marketplace, of moment which majority going whole impact we've through seeing I and opportunity on yes, you point stores traditional of customers Pizza but to our not having negative we're the through -- through as little But the through this a actually is Taco made vast see think it's coming the we by are bit Grubhub that are business. incremental XXX

David Gibbs

our customers platform customers use are that we trade through of customers still that to of wouldn't is cases the directly, part they're part but long area dine-in their we're process the those assets Sara, where are to and them assets test. if comes the so Grubhub U.S. question, and I the of on are right are there access. the through many different and in mean on in often to half of to excited trade the business assets Back your assets able part and versus encouraged State, area or be delivery oftentimes out the right are to carry in the the Pizza a other why the we That's still in modern of which about the piece, many in the dine-in the accessing majority vast wrong area the the to upgrading the take Pizza yes, close Grubhub Hut part think of I channels is on reposition the Yes, standard. Hut there we trade

So the are to of assets U.S. but our the different Internationally, of In problem. in the assets half U.S., challenges off-premise assets so versus has split a dine-in still a the dine-in healthy internationally of state of cases the and business most already it more XX% though. the very around in world XX/XX have we business are very are the the the is

from to there I on probably a the Before correct caught, prepared to typo. question, want you of we comment remarks, move a the just next some was

second impact disruption was on in was the As X% from that far to not that KFC, operating core the Yum! stated. X% UK the profit as the quarter, supply XXXX impact

number we all make So I set sure want the just right there.

Keith Siegner

please? question, Next

Operator

of from Our Ivankoe next of question the JPMorgan. comes line John

John Ivankoe

first you. It relatively mean small the that it accretive be I are does I quarter. first would before transaction and thank actually it Telepizza, neutral was think discussed Hi, terms to this net like there two At in earnings. been look has questions, in of

make of growth And what income comment that? a you will Telepizza thought in on mean to could So fiscal if there's some XXXX? operating type of

David Gibbs

from Telepizza to for going to QuickOrder neutral franchise it's again it profit growth relative We about us, But standpoint. be more than was seeing great an their long-term a Telepizza. may will to love be to Telepizza standpoint, in continue earnings from the There was is that's really from a in we're Telepizza. revenues related ability But some their from is impact a What to expenses, increase you acquisition is and that of what the we believe we impact team leverage markets management QX and the a them it us how means over potential. flat. excited existing for our and integration think

Operator

line UBS. of comes of the Geiger Our from Dennis next question

Dennis Geiger

for on balance seems whether think ever environment morning, the Good or the your you value on wondering the about I'm like remain thank could impact if bit QSR had strategy you're if the year U.S. as It or not. value on value you promotional And brands seeing the industry in more of any becomes talk the less QSR a your promotional depending you. currently. that as that's focused

importance kind here quickly value seeing be you're it to just greater Thanks. there guess most? franchisees system on buy-in benefits could do seems buy-in you is franchisee value appears And could So on like you related increases? gap which just comment that seeing of maybe better I that if than the from of think on that as your

Greg Creed

Yes, sure.

good obviously So there are in is two parts to economy shape. the question, U.S. pretty the look

people for QX in certainly the there from bifurcation are going will a always also incredibly value do people money marketplace that there We is lot some think the also, of are remain though I is there making certainly sort which on and the important. are numbers government, where of GDP look

distinct. building we've our value customer proposition relevant make to earlier is Part of the as for these sure got being every so And right focus we've run I think said the that in on relevant, we marketplace. and easy,

fundamentally focused David on to what franchisee to And on are in economics value, is on gets to then get as the ability question as really making assets, on -- on sort to at how is unit And will to to focus for level our value. which talked about. going on second We're innovation. I refurbishing and all they getting get assets, better franchise hang-in going focus sustain we And they'll are franchisees obviously predicated we're click-and-collect support as sure on ability I the new We're will invest and better. us they value that alignment. your three of focus is is it think core, going So that delivery innovation. we've brands

going their we're think value, this stay I benefiting, brands. pretty innovation, I'm economy stay I partners to that brands building in on really not relevant, ensure hard call are to excited have We're good so, the these that easy, worked are sustain going on going to distinct And what people is forward. in the really we shape with incredibly to model sort we're on who of There franchise can strong the are yes, U.S. benefiting. who people stay And going

Keith Siegner

Next please? question,

Operator

Our question of the David Tarantino line Baird. next of from comes

David Tarantino

morning. good Hi,

question. a one clarification, then Just

your be David year the that development the I the my for look question clarification, back history, then target was the is whether tell And that's plus on usually On globally to rate in If $X.XX can tends very real for you number QX it's units opened. point the embedded us number tax KFC and you've changed. low what at of strong.

is kind or at Thanks. as a year? to So is kind can year continue to of where across smooth we I of rest development momentum you're we kind issue the timing this the the of that openings in And starting step-up look the real of wanted ask this cycle. to out expect the

David Gibbs

David. Sure,

despite QX, the tax for tax low year. like in the that's for rate rate the feel XX% guidance to guidance question, and appropriate the XXXX we the On still is XX%

we by ramp rate the we've tends second in back in tax a get past years, confident development, If for us deals of really little And that in quarter of good a will pace goal this There It We're quarter. can I compensation saying you record mostly that's the Then a on KFC for year. mean continue. versus question for the the terms in share-based of do isn't a we in net last is been in the is cadence lower new history on timing pleased of and think do widespread issue. I look of Obviously, was with this development. QX up and momentum of that having hit year made. We're years. we've highs have the year consistent our to driven development first progress a pipeline to new is bit QX a exercised sort Global units. future recent

quarters happy by reasons previous with lot development. I've saw the they're You to China. talked lots about global for most be Yum! so the China getting returns of as KFC they're in optimistic as driven upside about of And

Keith Siegner

please. have time more we for question, one Operator,

Operator

you, Thank sir.

question Chris final O'Cull will come from of line the of Our Stifel.

Chris O’Cull

are how insights could U.S.? Thanks. be Could you consumers using into how large mean using KFC KFC delivery stores more individual bone-in orders, at the boneless using, guys parts product. it are talk is is with I party orders, in it customers the about Any X,XXX day helpful. are what delivery indexed over the under U.S. consumers in or

Greg Creed

years realizing I Sure, one bucket be we'd the that Chris. said, invented It delivering I tends the the be dinner packs. Kernel it's jokingly focused, to ago perfect always because delivery tends day vehicle. larger be XX it it think the to more

great device. KFC which that your on dinner, tasting So that's think a really said, seeing which food incredible is delivery I packs a seeing the And big bucket the delivered and obviously what delivers it's is It bone-in, hot, incremental. restaurant think quality also is expected a getting as focus benefit food. think piping what focus customer I is And I house. currently is to we're we to of see on I a sort

well. be think obviously the forward delivery in in exciting launch U.S. year will come KFC time the will that to an the positive So which I'm and all later as out going looking of we think I well. of things

Greg Creed

Okay.

remarks. closing some Just

thank being for today. everyone thank you, I of First want the to call on all,

Second, in I'm pleased start off a we're that strong XXXX. to

when the fact business, underlying mark-to-market in our indicate special items that of In health Grub, those some without our on metrics the so best investment I look noise at or the Grubhub.

about. XX% excited operating profit there's lot be X% and core system to delivered a think XX% growth. EPS We I growth, sales growth,

by underpinned maximizes lasting I'm will that Thanks being culture our us on the XXXX and shareholder growth value So call that with deliver very enviable confident beyond. for in today. unrivaled business

Operator

conference Thank call. today's does gentlemen. conclude ladies This you, and

may and day. disconnect have wonderful a now You

Yum! Brands (YUM) 1 May 192019 Q1 Earnings call transcript