Vehicles wait in line at the drive through lane of a Yum! Brands Inc. Kentucky Fried Chicken (KFC) and Taco Bell restaurant in Lockport, Illinois, U.S.
Daniel Acker | Bloomberg | Getty Images
Yum Brands on Thursday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by strong demand for KFC’s fried chicken.
However, Taco Bell’s perforance was weaker than expected, and led to a shortfall in Yum’s same-store sales growth.
Shares of the company fell less than 1% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Earnings per share: $1.22 adjusted vs. $1.08 expectedRevenue: $1.61 billion vs. $1.59 billion expected
The company reported fiscal third-quarter net income of $528 million, or $1.75 per share, up from $283 million, or 92 cents per share, a year earlier.
Excluding items, Yum earned $1.22 per share, beating the $1.08 per share expected by analysts surveyed by Refinitiv.
Net sales rose 11% to $1.61 billion, topping expectations of $1.59 billion. Across all of its chains, same-store sales increased by 5%. Wall Street was expecting same-store sales growth of 5.8%, according to StreetAccount estimates.
The global spread of the Covid delta variant weakened demand for Yum’s pizza, chicken and tacos in some of its key markets. Some customers may have stuck to ordering their food to go. Yum said it is seeing sustained momentum in digital sales.
KFC’s same-store sales climbed 6% after falling 4% a year ago. While growth in China, its largest market, was muted during the quarter, its home market saw same-store sales climb 4%. On a two-year basis, U.S. same-store sales were up 13%.
Pizza Hut reported same-store sales growth of 4% as international markets bounced back. In the United States, its same-store sales rose by just 2% as it faced tough comparisons to a year ago. On a two-year basis, Pizza Hut’s U.S. same-store sales are up 8%.
Taco Bell’s same-store sales rose 5% in the quarter and 8% on a two-year basis. The chain has struggled to recover late-night and breakfast sales throughout the pandemic. The Mexican-inspired chain’s same-store sales had the biggest miss of Yum’s portfolio. StreetAccount estimates forecast that the chain would report same-store sales growth of 6.2%.
Yum added 760 net new locations during the quarter, setting a record for the company.