Much like consumers who eagerly dive into a bag of fast food, only to regret it later, investors who reach for Yum! Brands ' (NYSE: YUM) based on recent quarterly results may later bemoan their impulse purchase. 

The parent company of quick-serve eateries such as KFC, Long John Silver's, and Pizza Hut, Yum! Brands treated investors to what initially appear to be compelling results. Global operating profit grew 15%, with China and the U.S. leading the gains. Earnings per share, meanwhile, registered $0.69 -- ahead of analyst estimates -- marking a 19% increase from the year-ago $0.58. If that makes you feel like slamming down a celebratory gordita, be advised that what follows could put you off your lunch.

In local currency, worldwide system sales were flat. Sales growth in the China and International segments owed exclusively to new store openings; same-store sales were unchanged, indicating that even consumers in rapidly recovering economiesare playing it cautious. Meanwhile, the U.S. business slipped badly: Same-store sales were down 6%, and Pizza Hut saw an ulcerous 13% sales decline. In part, that's likely the result of U.S. consumers eating at home more often; Kraft (NYSE: KFT), for instance, reported that second-quarter sales of its frozen DiGiorno pizza products were up by roughly 20%.

At this point, I suspect it's becoming clear that Yum! Brands' EPS beat hinged on lower year-over-year costs. Recurring expenses, including food and paper, declined 5.8%. That may not seem like much, but the savings work out to $0.30 per share. Said differently, in the absence of favorable commodity prices and cost cuts, profit would have plummeted. Now, investors can probably expect some of the savings to continue, but I wouldn't want to be around if -- or perhaps when-- rising commodity costs meet sluggish same-store sales.

Yum! nudged up its earnings forecast by $0.04, and it now expects 12% year-over-year earnings growth before one-time items. Its shares' current 14.6 forward P/E values the company below the pricier fare of Cheesecake Factory (Nasdaq: CAKE) and Starbucks (Nasdaq: SBUX), but above Burger King (NYSE: BKC) and McDonald's (NYSE: MCD). In broad strokes, that looks completely wrong. Going forward, I'd wager on the strength of fast food versus fancier eats, but I'd also give more credit to McDonald's, where same-store sales have been chugging along just fine.  

Granted, Yum! Brands' significant China presence is attractive. I'd be more positive on the company if same-store sales in the region had made a better showing. But there are other ways to get your China fix. For instance, why not consider food trends from the farming and production perspective, where China-based fertilizer maker Yonge International (Nasdaq: YONG) appears worth a look?

Alternatively, head on over to Motley Fool Global Gains : The analyst team is constantly scouring the globe in search of promising companies that won't leave you with post-investment indigestion.

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This article was originally published as Yum! Brands Serves Up Unsavory Quarteron Fool.com

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