Taco Bell reports sales jump
LOUISVILLE, Ky. — Taco Bell says a concoction made with a deep-fried chicken “taco shell” helped lure customers into its stores, and noted that it’s planning more “Naked” chicken menu items.
The chain’s sales jumped 8 percent at established locations in the first three months of the year, which it credited in part to $1 menu items and its limited-time Naked Chicken Chalupa. The results come as other restaurant chains have struggled to increase customer traffic in stores. McDonald’s and Starbucks earlier reported sales increases in the U.S., for instance, but said they were the result of higher pricing.
Already, Taco Bell is looking to build on the Naked Chicken Chalupa’s success, and this week rolled out fried chicken pieces shaped like tortilla chips served with a nacho cheese dipping sauce.
“Let’s not kid ourselves, you’ll see more Naked products — we’d be crazy not to,” said Greg Creed, CEO of Taco Bell parent company Yum Brands.
Taco Bell’s sales performance helped Yum report a profit for the first quarter that beat Wall Street expectations. But results were disappointing at the company’s struggling domestic Pizza Hut business, which saw sales decline 7 percent at established locations.
The pizza chain has suffered in part because of its history as a chain of sit-down restaurants, at a time when people increasingly look for speed and convenience. Domino’s, by contrast, has enjoyed six years of quarterly sales growth in the U.S., including a 10 percent jump in the latest quarter.
To spark a turnaround, Yum said it recently struck an agreement with Pizza Hut franchisees in the U.S. intended to better align the business on marketing efforts and give the chain a “digital, delivery-centric focus.”
Still, Creed noted the company has a “way to go” in turning around the domestic Pizza Hut business.
Meanwhile, KFC’s U.S. sales rose 2 percent at established locations, boosted by growth in transactions. Yum pointed to the chain’s improving results over the past couple years as an example of how it might be able to turn around Pizza Hut’s results.
Factoring in overseas results, Yum’s overall sales rose 2 percent at established locations in the quarter. The company split from its China business last year.
For the quarter, Yum Brands Inc. earned $280 million, or 77 cents per share. Excluding non-recurring gains, it earned 65 cents per share. That was better than the 60 cents per share analysts expected, according to Zacks Investment Research.
Total revenue for the quarter was $1.42 billion, also exceeding forecasts for $1.35 billion.
MENLO PARK, Calif. — Facebook Inc. on Wednesday reported firstquarter profit of $3.06 billion.
On a per-share basis, the Menlo Park, Californiabased company said it had profit of $1.04. Earnings, adjusted for stock option expense, came to $1.23 per share.
The results exceeded Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of $1.10 per share.
The social media company posted revenue of $8.03 billion in the period, also beating Street forecasts. Eleven analysts surveyed by Zacks expected $7.85 billion.
Facebook shares have climbed 32 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed almost 7 percent. In the final minutes of trading on Wednesday, shares hit $151.80, a climb of 29 percent in the last 12 months.
New York Times
NEW YORK — The New York Times added a record number of digital subscribers last quarter, exciting investors who pushed the stock to an 11 percent gain in morning trading.
The Times added 308,000 digital subscribers in the first quarter — its best quarter since it began offering digitalonly subscriptions in 2011. The additional subscribers helped boost the company to a net income of $13.2 million in the first quarter after reporting a loss of $8.3 million in the same period a year earlier.
Digital-only subscription revenues were up 40 percent over the first quarter of 2016, and advertising revenue for digital jumped 19 percent over the previous year’s quarter.
On a per-share basis, the Manhattan-based company said it had net income of 8 cents. Earnings, adjusted for one-time gains and costs, came to 11 cents per share. The company reported a loss of 5 cents per share for the first quarter last year.
The newspaper publisher posted revenue of $398.8 million in the period, beating the $379.5 million for the same period last year.
New York Times shares hit $15.90 in morning trading, an increase of about 28 percent in the past 12 months. Shares are up almost 20 percent since the beginning of the year.
Tesla
PALO ALTO, Calif. —Tesla Inc. on Wednesday reported a loss of $330.3 million in its first quarter.
The Palo Alto, Californiabased company said it had a loss of $2.04 per share. Losses, adjusted for stock option expense and costs related to mergers and acquisitions, were $1.33 per share.
The results did not meet Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for a loss of 55 cents per share.
The electric car maker posted revenue of $2.7 billion in the period, beating Street forecasts. Six analysts surveyed by Zacks expected $2.56 billion.
Tesla shares have climbed 46 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $311.02, an increase of 34 percent in the last 12 months.
Volkswagen
FRANKFURT, Germany — German automaker Volkswagen saw its first quarter profit jump 44 percent as it focused on selling more profitable models and worked past its scandal over diesel cars rigged to cheat on emissions tests.
Costs and fines from the scandal that emerged in Sept. 2015 have dinged Volkswagen’s large cash pile but the chief financial officer said Wednesday that the company was solid enough to handle added costs this year. Volkswagen also reaffirmed its profit goal for the full year.
After-tax profit rose to 3.4 billion euros ($3.7 billion) from 2.4 billion euros in the year-earlier quarter. The result beat the 3.1 billion euros expected by analysts surveyed by financial information provider FactSet.
Revenues, meanwhile, rose 10 percent to 56.2 billion euros.