Yum Brands on Tuesday reported quarterly earnings and revenue that missed Wall Street’s expectation as same-store sales at KFC and Pizza Hut slid more than expected.
Yum’s worldwide same-store sales fell 2% in the quarter, dragged down by weaker performances at KFC and Pizza Hut, which both reported same-store sales declines of 4%.
KFC’s same-store sales have tumbled as much as 45% over that period in the Middle East, Indonesia and Malaysia, for example.
The pizza chain saw its international same-store sales shrink 6%, while U.S. same-store sales fell just 1%.
Taco Bell, the gem of Yum’s portfolio, reported same-store sales growth of 4%.
Same-store sales at KFC and Pizza Hut fell more than anticipated on Tuesday, and Yum Brands reported quarterly earnings and revenue that fell short of Wall Street’s expectations.
“This year, our system-sales growth has fallen short of our long-term algorithm due to the significant regional sales variations caused by the complex consumer environment that exists in many markets around the world,” CEO David Gibbs stated during the company’s conference call.
Yum increased its long-term goals to 5% unit growth, 7% system-sales growth, and 8% operating profit growth in 2022.
According to an LSEG survey of analysts, this is how the company’s report contrasted with what Wall Street had anticipated.
Adjusted earnings per share: $1.37 versus. $1:41 is anticipated.
Revenue: $1.83 billion as opposed to… Anticipated is $1.90 billion.
Yum’s third-quarter net income was $382 million, or $1.35 per share, as opposed to $416 million, or $1.46 per share, the previous year.
The company made $1.37 per share, excluding items.
At $1.83 billion, net sales increased 7%.
KFC and Pizza Hut both reported same-store sales declines of 4%, which contributed to Yum’s 2 percent global same-store sales decline for the quarter.
Gibbs said in a statement that pressures from “geopolitical conflicts and challenged consumer sentiment” have hurt the company’s sales.
Yum’s performance has been impacted by the Middle East conflict since the fourth quarter of last year. During that time, KFC’s same-store sales in the Middle East, Indonesia, and Malaysia, for instance, have fallen by up to 45%.
U.S. S. This quarter, same-store sales decreased by 5%. KFC now has the second-largest market in the world, after China, but in recent years, Popeyes has gained market share. Popeyes surpassed KFC as the No. 1 last year. There are two chicken chains in the United States. A.
In the fourth quarter, KFC will prioritize value, executives announced Tuesday.
Conversely, Pizza Hut’s decline in foreign markets was more pronounced. The pizza chain saw a 6% decline in same-store sales abroad, while U.S. S. . Same-store sales only decreased by 1%. According to Gibbs, Pizza Hut has started to provide greater discounts in China, India, and a few Middle Eastern nations.
The jewel in Yum’s portfolio, Taco Bell, reported a 4% increase in same-store sales. Taco Bell’s sales during the quarter were increased by the introduction of a $7 value meal, the return of the Big Cheez-It, and the Cheesy Street Chalupas.
Despite an industry-wide slowdown, Taco Bell’s sales were boosted by its leadership in the third quarter in terms of value perception among all fast-food consumers, according to Gibbs.
The quote from Yum CEO David Gibbs has been corrected in this story.
