The posters are displayed outside Yum! Brands Inc. Taco Bell and Kentucky Fried Chicken (KFC) restaurant in Louisville, Kentucky, USA, on Thursday, January 30, 2020.
Lucas Sharrett | Bloomberg | fake images
Yum brands on Tuesday reported quarterly profit and revenue growth, driven by strong demand for Taco Bell and better sales at KFC in the United States.
The restaurant company also announced plans to review strategic options for Pizza Hut. The embattled pizza chain has struggled to win over diners in recent years. In its home market, pizza fatigue following pandemic shutdowns has caused sales to decline, and rivals such as Domino's Pizza have taken share away from Pizza Hut.
Yum shares rose 2% in premarket trading.
Here's what Yum reported compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: $1.58 adjusted. It may not compare to the expected $1.49.
- Revenue: $1.98 billion vs. $1.97 billion expected
Yum reported third-quarter net income of $397 million, or $1.41 per share, down from $382 million, or $1.35 per share, a year earlier.
Excluding the cost of its strategic review of Pizza Hut and other items, the company earned $1.58 per share.
Net sales rose 8% to $1.98 billion.
Yum's digital sales, including mobile, delivery and kiosk orders, reached $10 billion systemwide and accounted for approximately 60% of orders.
The company's comparable sales increased 3%, boosted by Taco Bell and KFC.
Taco Bell's comparable sales rose 7% in the quarter, beating analyst estimates of 5.2% growth, according to StreetAccount. While other fast food chains have seen their sales decline, the Mexican-inspired chain has bucked the trend. Its perceived value, even among low-income diners, and innovation in its menu have helped Taco Bell increase sales.
Yum announced that it will buy 128 Taco Bell locations in the southeastern U.S. The company franchises about 98% of its restaurants.
KFC reported comparable sales growth of 3%, beating StreetAccount estimates of 2.4%. In China, the brand's largest market, system sales increased 6%. And in the United States, where it has lost market share to new players such as Raising Cane's, KFC's comparable sales rose 2%.
Only Pizza Hut experienced declines in comparable sales. The struggling pizza chain reported that same-store sales fell 1% in the quarter, driven by a 7% drop in sales at U.S. restaurants open at least a year. Analysts surveyed by StreetAccount projected same-store sales declines of just 0.3%.
