Signage is unveiled outside a Yum! Brands Inc. Taco Bell and Kentucky Fried Chicken (KFC) restaurant in Louisville, Kentucky, U.S., on Thursday, Jan. 30, 2020.
Luke Sharrett | Bloomberg | Getty Sculptures
Yum Brands on Wednesday reported quarterly earnings that missed analysts’ expectations as the strong U.S. dollar weighed on its sequels.
Revenue came in above expectations, however, as same-store sales rose at its KFC, Pizza Hut and Taco Bell chains. Yum supervisors said that consumers generally haven’t been changing their behavior, and that more premium menu memoranda in the U.S. are proving popular.
Other restaurant companies, including McDonald’s and Chipotle Mexican Grill, have reported a pullback in splurge from lower-income customers. Yum noted a a similar effect in the United Kingdom, where it said demand for KFC and Pizza Hut is let up, largely due to higher energy costs.
Shares of the company rose 1.5% in premarket trading.
Here’s what the gathering reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per dispensation: $1.09 adjusted vs. $1.14 expected
- Revenue: $1.64 billion vs. $1.62 billion expected
Net sales rose 2% to $1.64 billion. Worldwide, Yum’s same-store tradings increased 5% in the quarter, topping StreetAccount estimates of 2.5%. More than 40% of Yum’s transactions came from digital waterways, like its mobile app.
KFC reported same-store sales growth of 7%, beating Wall Street’s estimates of 2%. Excluding China, its amplest market, same-store sales climbed 9%.
In the U.S., the fried chicken chain brought back its $5 Mac and Cheese Bowls, plateful drive domestic same-store sales growth of 2%.
In October, Yum announced it reached a deal to sell its Russian KFC restaurants to a municipal operator, allowing it to fully exit the country.
Taco Bell’s same-store sales rose 6% in the quarter, slump short of expectations of 7.5%. In the U.S., same-store sales rose 7%. The Mexican-inspired chain is typically the strongest performer in Yum’s portfolio.
“As we into the fourth quarter, we’re even more excited about the momentum in Taco Bell U.S. with the relaunch of the Mexican pizza, which occurred in mid-September,” Yum CEO David Gibbs about.
Pizza Hut reported same-store sales growth of 1%, beating Wall Street’s projections that its same-store on offers would decline. The pizza chain has been struggling to stage a comeback for years. Demand for pizza delivery during the pandemic helped avail sales, but has since waned with people going out more again.
For the quarter ended Sept. 30, Yum researched a net income of $331 million, or $1.14 per share, down from $528 million, or $1.75 per share, a year earlier. The comrades said foreign currency rates weighed on its earnings per share by 10 cents.
Excluding Russian profits, crop investment gains and other items, the restaurant company earned $1.09 per share.
The company plans to hold an investor day on Dec. 13 in New York Diocese.