Yum Brands posts mixed quarter, Taco Bell shines

Yum Brands on Wednesday reported mixed quarterly outcomes, regardless of sturdy demand for Taco Bell.

This is what the corporate reported for the interval ended Dec. 31 in contrast with what Wall Road was anticipating, based mostly on a survey of analysts by LSEG:

• Earnings per share: $1.73 adjusted vs. $1.77 anticipated
• Income: $2.51 billion vs. $2.45 billion anticipated

Yum reported fourth-quarter web earnings of $535 million, or $1.91 per share, up from $423 million, or $1.49 per share, a yr earlier. The corporate’s tax charge was greater than anticipated by Wall Road, based on Kalinowski Fairness Analysis.

Excluding tax advantages, acquisition prices and different one-time gadgets, the restaurant firm earned $1.73 per share.

Web income rose 6% to $2.51 billion.

Yum’s world same-store gross sales elevated 3%, fueled by sturdy efficiency at Taco Bell and in KFC’s worldwide markets.

Taco Bell’s same-store gross sales spiked 7% within the quarter, topping Wall Road expectations of 5.6% progress, based on StreetAccount.

The Mexican-inspired chain is the gem of Yum’s portfolio, usually outperforming the broader fast-food trade, because of a mixture of worth choices and buzzy menu gadgets. The chain is stealing market share from opponents, and customers aged 18 to 24 years outdated are flocking to its eating places, Yum CEO Chris Turner stated on the corporate’s convention name.

KFC noticed its world same-store gross sales rise 3%. The fried rooster chain’s worldwide areas reported same-store gross sales progress of three%, whereas eating places within the U.S. noticed a same-store gross sales improve of 1%.

Wall Road analysts had anticipated KFC to report same-store gross sales progress of two.1%, based on StreetAccount.

KFC has been present process a turnaround in its residence market, the place it has ceded market share to upstarts like Elevating Cane’s in recent times. To win again prospects, it’s taking some cues from Taco Bell’s profitable playbook. The chain is planning to unveil new menu gadgets, like sauces and drinks, at a extra fast tempo than it beforehand did. The chain will even attempt to supply prospects extra reasonably priced choices, whether or not it’s a “worthwhile low-price level merchandise” or focused particular person worth gives, executives stated on the corporate’s convention name.

And as soon as once more, Pizza Hut was the laggard of the portfolio. The embattled pizza chain reported that its same-store gross sales declined 1%, pushed by a 3% drop within the U.S. and barely edging out Wall Road estimates of a 1.7% decline throughout the interval.

In November, the corporate stated it will discover strategic choices for Pizza Hut. Yum on Wednesday stated that the evaluate had begun however didn’t share extra particulars.

“As of now, we intend to finish the evaluate of choices this yr,” Turner stated. “Given the continued nature of the method at the moment, we can’t share additional particulars on the strategic evaluate.”

Whereas Pizza Hut undergoes the evaluate, Yum can also be implementing a technique that may act as a “bridge to a longer-term acceleration of the model,” based on CFO Ranjith Roy. As a part of that plan, Pizza Hut will shutter about 250 underperforming U.S. areas within the first half of the yr.