Signage is displayed outdoors a Yum! Manufacturers Inc. Taco Bell and Kentucky Fried Hen (KFC) restaurant in Louisville, Kentucky, U.S., on Thursday, Jan. 30, 2020.
Luke Sharrett | Bloomberg | Getty Pictures
Yum Brands on Wednesday reported quarterly earnings that missed analysts’ expectations because the robust U.S. greenback weighed on its outcomes.
Income got here in above expectations, nonetheless, as same-store gross sales rose at its KFC, Pizza Hut and Taco Bell chains. Yum executives stated that customers typically have not been altering their conduct, and that extra premium menu gadgets within the U.S. are proving in style.
Different restaurant firms, together with McDonald’s and Chipotle Mexican Grill, have reported a pullback in spending from lower-income prospects. Yum famous a an analogous impact in the UK, the place it stated demand for KFC and Pizza Hut is lagging, largely because of increased vitality prices.
Shares of the corporate rose 1.5% in premarket buying and selling.
Here is what the corporate reported in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by Refinitiv:
- Earnings per share: $1.09 adjusted vs. $1.14 anticipated
- Income: $1.64 billion vs. $1.62 billion anticipated
Web gross sales rose 2% to $1.64 billion. Worldwide, Yum’s same-store gross sales elevated 5% within the quarter, topping StreetAccount estimates of two.5%. Greater than 40% of Yum’s transactions got here from digital channels, like its cellular app.
KFC reported same-store gross sales development of seven%, beating Wall Road’s estimates of two%. Excluding China, its largest market, same-store gross sales climbed 9%.
Within the U.S., the fried rooster chain introduced again its $5 Mac and Cheese Bowls, serving to drive home same-store gross sales development of two%.
In October, Yum introduced it reached a deal to promote its Russian KFC eating places to a neighborhood operator, permitting it to completely exit the nation.
Taco Bell’s same-store gross sales rose 6% within the quarter, falling in need of expectations of seven.5%. Within the U.S., same-store gross sales rose 7%. The Mexican-inspired chain is often the strongest performer in Yum’s portfolio.
“As we enter the fourth quarter, we’re much more excited concerning the momentum in Taco Bell U.S. with the relaunch of the Mexican pizza, which occurred in mid-September,” Yum CEO David Gibbs stated.
Pizza Hut reported same-store gross sales development of 1%, beating Wall Road’s projections that its same-store gross sales would decline. The pizza chain has been struggling to stage a comeback for years. Demand for pizza supply throughout the pandemic helped increase gross sales, however has since waned with folks going out extra once more.
For the quarter ended Sept. 30, Yum reported a internet earnings of $331 million, or $1.14 per share, down from $528 million, or $1.75 per share, a yr earlier. The corporate stated overseas foreign money charges weighed on its earnings per share by 10 cents.
Excluding Russian earnings, decrease funding good points and different gadgets, the restaurant firm earned $1.09 per share.
The corporate plans to carry an investor day on Dec. 13 in New York Metropolis.
