Pizza Hut 2010 Annual Report Download - page 137

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Company Operated Store Results
The following tables detail the key drivers of the year-over-year changes of Company sales and Restaurant profit. Store
portfolio actions represent the net impact of new unit openings, acquisitions, refranchisings and store closures on
Company sales or Restaurant profit. The impact of new unit openings and acquisitions represent the actual Company
sales or Restaurant profit for the periods the Company operated the restaurants in the current year but did not operate them
in the prior year. The impact of refranchisings and store closures represent the actual Company sales or Restaurant profit
for the periods in the prior year while the Company operated the restaurants but did not operate them in the current year.
The dollar changes in Company Restaurant profit by year were as follows:
China Division
2010 vs. 2009
Income / (Expense)
2009
Store
Portfolio
Actions Other FX 2010
Company sales $ 3,352 $ 484 $ 207 $ 38 $ 4,081
Cost of sales (1,175) (162) (12) (13) (1,362)
Cost of labor
(
447
)
(
78
)
(
56
)
(
6
)
(
587
)
Occupancy and other
(
1
,
025
)
(
160
)
(
35
)
(
11
)
(
1
,
231
)
Restaurant
p
rofi
t
$
705
$
84
$
104
$
8
$
901
Restaurant margin 21.0% 22.1
%
2009 vs. 2008
Income / (Expense)
2008
Store
Portfolio
Actions Other FX 2009
Company sales $ 2,776 $ 532 $
(
10
)
$ 54 $ 3,352
Cost of sales
(
1
,
049
)
(
193
)
86
(
19
)
(
1
,
175
)
Cost of labor
(
364
)
(
79
)
3
(
7
)
(
447
)
Occupancy and other
(
827
)
(
190
)
8
(
16
)
(
1
,
025
)
Restaurant
p
rofi
t
$
536
$
70
$
87
$
12
$
705
Restaurant margin 19.3% 21.0
%
In 2010, the increase in China Division Company sales and Restaurant profit associated with store portfolio actions was
primarily driven by the development of new units and the acquisition of additional interest in and consolidation of a
former China unconsolidated affiliate during 2009 (See Note 4 for further discussion). Significant other factors impacting
Company sales and/or Restaurant profit were Company same store sales growth of 6% and commodity deflation of $26
million partially offset by labor inflation. Additionally, China Division Restaurant profit benefited $16 million from our
brands’ participation in the World Expo during 2010. This benefit will not occur in 2011.
In 2009, the increase in China Division Company sales and Restaurant profit associated with store portfolio actions was
primarily driven by the development of new units and the acquisition of additional interest in and consolidation of a
former China unconsolidated affiliate during 2009. Commodity deflation (primarily chicken) of $62 million also
impacted Restaurant profit. Company same store sales were flat for the year.
Form 10-K