KFC and Taco Bell restaurants along 118th Avenue in Edmonton, on January 21, 2024, in Edmonton, Alberta, Canada.
Artur Widak | Nurfoto | fake images
Yum brands On Wednesday it reported quarterly earnings and revenue that missed analyst expectations, noting that the war between Israel and Hamas hurt its sales.
Yum is the third global restaurant giant to report disappointing revenue for the final three months of 2023. starbucks and McDonald's Both fell short of Wall Street's expectations and also cited the war between Israel and Hamas among their headwinds.
“During the quarter, core sales were impacted by conflict in the Middle East region with varying degrees of impact on the Middle East, Malaysia and Indonesia markets,” Yum CEO David Gibbs told analysts on the company's conference call. “This represented a single-digit headwind to Yum's overall sales growth.”
Gibbs added that sales trends continued through the first quarter and will likely decline throughout the year.
Yum shares rose nearly 2% on Wednesday.
Here's what Yum Brands reported compared to what Wall Street expected, according to a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: $1.26 adjusted vs. $1.40 expected
- Revenue: $2.04 billion vs. $2.11 billion expected
Yum reported fourth-quarter net income of $463 million, or $1.62 per share, down from $371 million, or $1.29 per share, a year earlier.
Excluding items, the restaurant giant earned 1.26 cents per share. The company said its quarterly tax rate fluctuated, reducing its earnings by 23 cents per share.
net sales rose 1% to $2.04 billion. The company's global same-store sales also increased 1%.
Pizza Hut reported comparable sales declines of 2%, missing expectations for 0.6% growth. The pizza chain's comparable sales in the United States fell 4%, while its international comparable sales remained stable.
Pizza Hut, in particular, saw its sales drop in some markets as a result of the war between Israel and Hamas, the company said. Some activists called for a boycott of the pizza chain after the Israeli Pizza Hut franchise posted an Instagram story suggesting it gave free pizza to Israeli soldiers.
KFC's comparable sales rose 2%, missing StreetAccount estimates of 4.7%. In the first quarter, KFC's US team plans to launch the smashed potato bowl and the chain's first loyalty program to revive sales.
Even Taco Bell, usually the jewel of Yum's portfolio, underperformed Wall Street's expectations. The Mexican-inspired chain reported comparable sales growth of 3%, missing StreetAccount estimates of 3.8%. A year earlier, the chain reported same-store sales growth of 11%, fueled by the permanent return of its cult-favorite Mexican pizza.
In 2024, Yum plans to surpass several important milestones in its global presence. Yum will surpass 60,000 locations, Gibbs said in a statement, including a KFC footprint of more than 30,000 restaurants and a Pizza Hut account of more than 20,000.
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