A continuing Chinese love affair with American fast food is translating into solid earnings for Yum! Brands and McDonald’s.
Net income at Yum! Brands rose 73 percent year-over-year to $458 million, equal to 99 cents per share on the common stock, in the first quarter ended March 24. This compared with income of $264 million, or 56 cents per share, in the same period a year ago.
The company said its China business “continues to fire on all cylinders.” Yum! set a new unit development record in China with the opening of 168 new restaurants in the first quarter. Sales in the region grew 28 percent year-over-year, while operating profit rose 14 percent to $256 million from $215 million.
McDonald’s credited strong global sales for its 5 percent year-over-year increase in net income during its first quarter.
McDonald’s also saw U.S. revenue increase because of new menu items. Comparable sales in the Asia/Pacific/Middle East and Africa regions rose 5.5 percent year-over-year, and operating income was up 10 percent.
While the restaurant chains source some food locally, the majority is imported, leading to higher sales of U.S. meat, poultry and potatoes.