KFC and Pizza Hut sales heat up

By Phil Boeyen, ShareChat Business News Editor

Tuesday 11th December 2001

Fast food operator Restaurant Brands (NZSE: RBD) is showing strong same-store sales growth in its two major brands, KFC and Pizza Hut.

The company has reported same-store growth of 6.6% for its KFC business in the 12 weeks to the start of December and 11.6% growth at Pizza Hut.

Total sales for the fourth quarter rose 11.8% to $62.6 million compared to $56 million a year ago, with all three brands recording increases.

Sales at Starbucks Coffee outlets grew by an impressive 61.5% to $4.5 million although same-store sales actually fell by 7.2%.

CEO Jim Collier says the decline in same-store sales at Starbucks was due to the rolling over of a price increase the previous year and cannibalisation in some stores arising from new store openings.

"Same-store sales growth was expected to return to Starbucks by the second quarter of the 2002 calendar year."

Mr Collier says KFC same-store sales growth has been the strongest in 5 years as a result of good growth in the takeaway food category and the success of promotional initiatives.

"Pizza Hut continued the double digit same store sales growth seen in the third quarter of this year.

"Last year's expansion and change in format to home delivery and takeaway continues to pay dividends, with Pizza Hut the market leader in this growing segment."

KFC provides the bulk of Restaurant Brands' sales although Pizza Hut is continuing to increase its share of the company's overall revenue following last year's acquisition of the Eagle Boys Pizza chain.

The company's stock has been rerated in recent months as investors clamp eyes on its strong dividend yield and as expansion plans begin to bear fruit.

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