Yum Brands underperforms with disappointing sales at KFC, Taco Bell, and Pizza Hut

KFC and Taco Bell restaurants along 118th Avenue in Edmonton, on January 21, 2024, in Edmonton, Alberta, Canada.Artur Widak | Nurphoto | Getty ImagesYum Brands reported quarterly earnings and revenue below analysts’ expectations as KFC, Taco Bell, and Pizza Hut all posted weaker-than-anticipated sales. This adds Yum to the list of global restaurant giants that have disappointed with their revenue for the last three months of 2023, joining Starbucks and McDonald’s who have also fell short of Wall Street’s expectations, citing the Israel-Hamas war as one of the difficulties faced.Yum’s stock experienced a more than 1% decrease in premarket trading. Here’s what Yum Brands reported compared to what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:Earnings per share: $1.26 adjusted vs. $1.40 expectedRevenue: $2.04 billion vs. $2.11 billion expectedYum reported a fourth-quarter net income of $463 million, or $1.62 per share, up from $371 million, or $1.29 per share, a year earlier. Excluding items, the restaurant giant earned $1.26 per share. The company stated that its quarterly tax rate fluctuated, leading to a 23 cents per share decrease in its earnings. Net sales increased by 1% to $2.04 billion. The company’s global same-store sales also rose by 1%.Pizza Hut reported a 2% decline in same-store sales, missing expectations of 0.6% growth. The pizza chain’s U.S. same-store sales dropped by 4%, while its international same-store sales remained unchanged.KFC’s same-store sales saw a 2% increase, falling short of the StreetAccount estimates of 4.7%.Even Taco Bell, typically a standout in Yum’s portfolio, failed to meet Wall Street’s expectations. The Mexican-inspired chain reported a 3% growth in same-store sales, missing StreetAccount estimates of 3.8%. In the prior year, the chain had reported an 11% growth in same-store sales, driven by the permanent return of its beloved Mexican Pizza.Yum plans to achieve several major milestones for its global footprint in 2024. CEO David Gibbs stated in a release that Yum’s footprint will surpass 60,000 locations, including a KFC footprint of over 30,000 restaurants and a Pizza Hut tally of more than 20,000.

Author: OpenAI