Yum! Brands beat third-quarter earnings expectations Tuesday, while weaker results at Taco Bell and a completed Pizza Hut divestiture shaped results that varied across the restaurant group.
Adjusted earnings reached $1.56 per share, topping the $1.49 estimate in an LSEG analyst survey. Revenue was $2.05 billion, matching the survey’s forecast; net sales rose 4% to $2.05 billion.
Its fiscal third-quarter net income totaled $1.62 billion, or $5.92 per share; a year earlier, it was $397 million, or $1.41 per share. The reported results included gains from the Pizza Hut disposal and other items. Excluding those items, earnings were $1.56 per share.
Yum completed the Pizza Hut sale during the quarter in two steps. LongRange Capital acquired the remaining business Sept. 1, after Yum China took over the mainland China operation Aug. 7. Yum included Pizza Hut results only through the respective closing dates. With the chain excluded, Yum recorded no change in same-store sales.
Taco Bell’s same-store sales fell 4%. CNBC reported that a cyclospora outbreak contributed to fewer visits, and Yum executives said the sharpest sales effect came during the weekend of July 18 before trends improved. Yum! Brands CEO Chris Turner said Taco Bell U.S. same-store sales had grown faster than the quick-service restaurant industry since late September.
CNBC said Yum views Taco Bell as a growth engine. The brand’s business outside the United States is considerably smaller, though same-store sales there advanced 5%.
KFC’s same-store sales increased 1%, with advances in China and Europe supporting its system-sales results. In the United States, KFC system sales fell 6%. CNBC cited more rivals and customers paying closer attention to spending as pressures on the U.S. chain. The United States is now KFC’s third-largest market, CNBC reported.
