Yum! Brands (NYSE:YUM) plunged nearly 4% yesterday after the company reported its Q1 earnings results, with EPS of $1.06 coming in worse than the Street estimate of $1.13. Revenue was $1.65 billion, compared to the Street estimate of $1.62 billion.
The three largest brands delivered high-single-digit comp growth, with momentum carrying forward into Q2. However, higher-than-anticipated expenses weighed on margins and drove the EPS miss.
According to the analysts at RBC Capital, the headwinds are temporary and they expect the company to continue to post strong (over 20%) earnings growth for the balance of the year.