Yum! Brands (NYSE:YUM) has announced impressive results for their third quarter, reporting a 6% increase in same-store sales, surpassing expectations of a 4.9% gain. Their global system sales also saw significant growth of 10%, excluding foreign currency translation.
KFC’s Strong Performance
KFC was the standout performer for Yum! Brands during this quarter, with a remarkable 12% increase in sales. This substantial growth can be attributed to positive same-store sales growth of 6%, which surpassed the consensus expectation of 5.7%. Furthermore, KFC experienced a remarkable 14% rise in core operating profit, showcasing the company’s impressive performance.
Taco Bell’s Growth
Taco Bell, another chain under Yum! Brands, also delivered impressive results with an 11% growth in sales. The brand achieved 8% growth in same-store sales, outperforming the consensus expectation of 6.7%. This strong performance further solidifies Taco Bell’s position as a key player in the fast-food industry.
Pizza Hut’s Steady Performance
Pizza Hut, the third chain under Yum! Brands, witnessed a 4% increase in sales. Though this figure is lower compared to KFC and Taco Bell, it is still a positive result for the company. Pizza Hut achieved 1% growth in same-store sales, slightly below the consensus expectation of 2.2%. Despite this, the brand continues to be a valuable contributor to Yum! Brands’ overall success.
Impressive Financial Results
Yum! Brands reported a remarkable 16% rise in core operating profit across the company, driven mainly by a 14% increase in the KFC division. This exceptional financial performance resulted in earnings per share (EPS) of $1.44, surpassing both the consensus mark of $1.27 and the $1.09 mark from the previous year.
CEO’s Positive Outlook
Yum! Brands’ CEO expressed confidence in sustaining the company’s momentum for the years to come. With a strong year-to-date performance, they expect their full-year 2023 results to outperform all aspects of their long-term growth algorithm. The company plans to continue enhancing their customer insights platforms and expanding their global loyalty programs for continued digital growth.
Analyst Insights
Wall Street analyst Andrew Charles from Cowen highlighted the outstanding performance of Taco Bell during the third quarter. Additionally, Yum! Brands exceeded expectations with a global net restaurant development of 6.1%—outpacing both Cowen’s estimate of 5.5% and the consensus estimate of 5.8%. Charles also noted that the third-quarter EPS beat was mainly influenced by factors below the line.
Market Reaction
Yum! Brands’ stock, listed under the ticker symbol YUM, experienced a slight dip of 0.71% in premarket trading, reaching $120.00. The stock’s 52-week range is between $115.53 and $143.25.
Overall, Yum! Brands’ exceptional financial results and strong performance across their KFC, Taco Bell, and Pizza Hut chains highlight their continued dominance in the fast-food industry. With a positive outlook from the CEO and promising analyst insights, the company is well-positioned for sustained success in the years ahead.
