Pizza Hut 2005 Annual Report Download - page 36

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Company-owned฀restaurants฀only.฀U.S.฀same฀store฀sales฀for฀
Long฀John฀Silver’s฀and฀A&W฀restaurants฀are฀not฀included.฀
Following฀are฀the฀same฀store฀sales฀growth฀results฀by฀brand:
฀ Same฀฀ ฀ Average฀
฀ Store฀฀ ฀ Guest฀
2005฀ Sales฀ Transactions฀ Check
KFC฀ ฀ ฀ 6%฀ ฀ 5%฀ ฀ 1%
Pizza฀Hut฀ ฀ —%฀ ฀(5)%฀ ฀ 5%
Taco฀Bell฀ ฀ 7%฀ ฀ 3%฀ ฀ 4%
฀ Same฀฀ ฀ Average฀
฀ Store฀฀ ฀ Guest฀
2004฀ Sales฀ Transactions฀ ฀Check
KFC฀ ฀ ฀ (2)%฀ ฀ (4)%฀ ฀ 2%
Pizza฀Hut฀ ฀ 5%฀ ฀ 2%฀ ฀ 3%
Taco฀Bell฀ ฀ 5%฀ ฀ 3%฀ ฀ 2%
In฀ 2005฀ and฀ 2004,฀ blended฀ Company฀ same฀ store฀ sales฀
increased฀ 4%฀ and฀ 3%,฀ respectively,฀ due฀ to฀ increases฀ in฀
average฀guest฀check฀and฀transactions.
In฀2005฀and฀2004,฀the฀increase฀in฀U.S.฀franchise฀and฀
license฀ fees฀ was฀ driven฀ by฀ new฀ unit฀ development,฀ same฀
store฀ sales฀ growth฀ and฀ refranchising,฀partially฀ offset฀ by฀
store฀closures.
In฀2005,฀the฀decrease฀in฀International฀Division฀Company฀
sales฀ was฀ driven฀ by฀ refranchising฀ (primarily฀ our฀ Puerto฀
Rico฀business)฀and฀store฀closures,฀partially฀offset฀by฀new฀
unit฀ development.฀ In฀ 2004,฀ the฀ increase฀ in฀ International฀
Division฀Company฀sales฀was฀driven฀by฀acquisitions฀of฀fran-
chisee฀ restaurants฀ (primarily฀ cer tain฀ units฀ in฀ Canada฀ we฀
now฀operate),฀new฀unit฀development฀and฀same฀store฀sales฀
growth,฀partially฀offset฀by฀refranchising฀and฀store฀closures.
In฀2005,฀the฀increase฀ in฀International฀ Division฀fran-
chise฀and฀license฀fees฀was฀driven฀by฀new฀unit฀development,฀
refranchising฀ (primarily฀ our฀ Puerto฀ Rico฀ business),฀ and฀
royalty฀rate฀increases.฀In฀2004,฀the฀increase฀in฀International฀
Division฀franchise฀and฀license฀fees฀was฀driven฀by฀new฀unit฀
development,฀same฀store฀sales฀growth฀and฀refranchising,฀
partially฀offset฀by฀ store฀closures฀ and฀our฀acquisitions฀of฀
franchisee฀restaurants฀(primarily฀certain฀units฀in฀Canada฀
which฀we฀now฀operate).
In฀2005,฀the฀increase฀in฀China฀Division฀Company฀sales฀
was฀driven฀by฀new฀unit฀development,฀partially฀offset฀by฀the฀
impact฀of฀same฀store฀sales฀declines฀driven฀by฀the฀mainland฀
China฀ supplier฀ ingredient฀ issue฀ and฀ consumer฀ concerns฀
related฀to฀Avian฀Flu.฀In฀2004,฀the฀increase฀in฀China฀Division฀
Company฀sales฀ was฀ driven฀ by฀ new฀ unit฀development฀ and฀
same฀store฀sales฀growth.
In฀2005,฀the฀increase฀in฀China฀Division฀franchise฀and฀
license฀fees฀was฀driven฀by฀new฀unit฀development,฀partially฀
offset฀by฀the฀impact฀of฀same฀store฀sales฀declines฀driven฀by฀
the฀mainland฀China฀supplier฀ingredient฀issue฀and฀consumer฀
concerns฀related฀to฀Avian฀Flu.฀In฀2004,฀the฀increase฀in฀China฀
Division฀franchise฀and฀license฀fees฀was฀primarily฀driven฀by฀
new฀unit฀development.
COMPANY฀RESTAURANT฀MARGINS
฀ ฀ Inter-฀
฀ ฀ national฀฀ China฀
2005฀ U.S.฀ Division฀ ฀Division฀ Worldwide
Company฀sales฀ 100.0%฀ 100.0%฀ 100.0%฀ 100.0%
Food฀and฀paper฀ 29.8฀ 33.1฀ 36.2฀ 31.4
Payroll฀and฀employee฀฀
฀ benefits฀ 30.2฀ 24.1฀ 13.3฀ 26.4
Occupancy฀and฀other฀฀
฀ operating฀expenses฀ 26.2฀ 30.7฀ 33.1฀ 28.2
Company฀restaurant฀margin฀ 13.8%฀ 12.1%฀ 17.4%฀ 14.0%
฀ ฀ Inter-฀
฀ ฀ national฀฀ China฀
2004฀ U.S.฀ Division฀ ฀Division฀ Worldwide
Company฀sales฀ 100.0%฀ 100.0%฀ 100.0%฀ 100.0%
Food฀and฀paper฀ 29.9฀ 33.8฀ 37.1฀ 31.8
Payroll฀and฀employee฀฀
฀ benefits฀ 30.5฀ 23.8฀ 11.5฀ 26.4
Occupancy฀and฀other฀฀
฀ operating฀expenses฀ 25.8฀ 29.4฀ 31.1฀ 27.3
Company฀restaurant฀margin฀ 13.8%฀ 13.0%฀ 20.3%฀ 14.5%
฀ ฀ Inter-฀
฀ ฀ national฀฀ China฀
2003฀ U.S.฀ Division฀ ฀Division฀ Worldwide
Company฀sales฀ 100.0%฀ 100.0%฀ 100.0%฀ 100.0%
Food฀and฀paper฀ 28.8฀ 34.1฀ 38.0฀ 30.9
Payroll฀and฀employee฀฀
฀ benefits฀ 31.0฀ 23.8฀ 10.7฀ 27.2
Occupancy฀and฀other฀฀
฀ operating฀expenses฀ 25.6฀ 29.1฀ 31.5฀ 27.1
Company฀restaurant฀margin฀ 14.6%฀ 13.0%฀ 19.8%฀ 14.8%
In฀2005,฀U.S.฀restaurant฀margins฀as฀a฀percentage฀of฀sales฀
were฀flat฀compared฀to฀2004.฀The฀impact฀of฀same฀store฀sales฀
growth฀on฀restaurant฀margin฀was฀offset฀by฀higher฀occupancy฀
and฀ other฀costs.฀ Higher฀occupancy฀ and฀ other฀costs฀were฀
driven฀by฀increases฀in฀utility฀costs฀and฀advertising฀costs.฀
A฀favorable฀impact฀from฀ the฀53rd฀week฀(13฀basis฀ points)฀
was฀ offset฀ by฀ the฀ unfavorable฀ impact฀ of฀ the฀ adoption฀ of฀
SFAS฀123R฀(17฀basis฀points).
In฀2004,฀the฀decrease฀in฀U.S.฀restaurant฀margins฀as฀
a฀percentage฀of฀sales฀was฀driven฀by฀higher฀food฀and฀paper฀
costs฀and฀higher฀occupancy฀and฀other฀costs,฀partially฀offset฀
by฀ the฀ impact฀ of฀ same฀ store฀ sales฀ growth฀ on฀ restaurant฀
margin.฀Higher฀food฀and฀paper฀costs฀were฀primarily฀driven฀by฀
increased฀commodity฀costs฀(principally฀cheese฀and฀meats)฀
and฀higher฀occupancy฀and฀other฀costs฀were฀primarily฀driven฀
by฀increased฀expense฀resulting฀from฀the฀adjustment฀related฀
to฀our฀accounting฀for฀leases฀and฀the฀depreciation฀of฀lease-
hold฀improvements.
In฀ 2005,฀ the฀ decrease฀ in฀ the฀ International฀ Division฀
restaurant฀ margins฀ as฀ a฀ percentage฀ of฀ sales฀ included฀ a฀
51฀basis฀ point฀ unfavorable฀ impact฀ of฀ refranchising฀ our฀
restaurants฀in฀Puerto฀Rico.฀Also฀contributing฀to฀the฀decrease฀
40.฀ ฀ ฀ |฀ ฀ ฀ Yum!฀Brands,฀Inc.