Yum Brands (YUM) Q1 2024 earnings

A Pizza Hut store is seen on November 01, 2023 in Austin, Texas.

Brandon Bell | Getty Images

Yum Brands on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations as Pizza Hut and KFC struggled to attract customers.

Shares of the company fell nearly 4% in early trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

  • Earnings per share: $1.15 adjusted vs. $1.20 expected
  • Revenue: $1.6 billion vs. $1.71 billion expected

Yum reported first-quarter net income of $314 million, or $1.10 per share, up from $300 million, or $1.05 per share, a year earlier.

Excluding investment losses and other items, the company earned $1.15 per share.

Net sales dropped 3% to $1.6 billion. Yum’s global same-store sales also fell 3% in the quarter, missing StreetAccount estimates of 0.2% same-store sales growth.

Across Yum’s three largest brands, only Taco Bell reported same-store sales growth. The metric rose 1% during the quarter at the Mexican-inspired chain. Taco Bell’s U.S. locations reported same-store sales growth of 2%, while its international business posted a decline of 2%. Executives said the chain had a stronger start to the second quarter.

KFC’s same-store sales fell 2% in the quarter. The bigger decline came in the U.S., where they shrank 7%. However, the chicken chain’s international division saw same-store sales decrease just 2%, thanks to growth in China, its largest market. A year ago, KFC’s quarterly same-store sales rose 9%.

Pizza Hut reported same-store sales dropped 7%, as demand lagged both in its home market and internationally. The pizza chain’s U.S. restaurants reported a decrease of 6%, while its international division posted an 8% decline. The chain faced tough comparisons to the year-ago period, when Pizza Hut reported 7% same-store sales growth, fueled by its new Melts.

Broadly, Yum’s international business struggled, which the company blamed partially on its Middle Eastern restaurants. It is unclear if the hit has come from boycotts related to the war in Gaza that have affected other chains or from other disruptions.

“While the impacts from the Middle East conflict have been scattered and difficult to measure, we’ve begun to see improvement in the most impacted markets,” Yum CEO David Gibbs told analysts on the company’s conference call.

Yum’s digital business was one of the few bright spots this quarter. The company said its digital sales accounted for more than 50% of sales for the first time.

In the second quarter, Yum plans to expand its pilot of artificial intelligence that takes drive-thru orders. The original test occurred at five Taco Bell locations in California; soon, 35 restaurants will try out the technology.

Yum’s global footprint grew 6% in the quarter, thanks to 808 new restaurant openings.

Don’t miss these exclusives from CNBC PRO

Source link

Related Posts

Premium chocolatiers thrive as consumers develop taste for luxury

Unlock the Editor’s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Luxury chocolatiers are shrugging off volatile raw material costs to…

Read more

Putin declares 30-hour Easter ceasefire in Ukraine

Stay informed with free updates Simply sign up to the War in Ukraine myFT Digest — delivered directly to your inbox. Russian President Vladimir Putin has ordered his army to…

Read more

US Supreme Court temporarily halts deportations of migrants

Unlock the White House Watch newsletter for free Your guide to what the 2024 US election means for Washington and the world The US Supreme Court has temporarily barred Donald…

Read more

US and Iran begin second round of talks to end nuclear stand-off

Unlock the White House Watch newsletter for free Your guide to what the 2024 US election means for Washington and the world US envoy Steve Witkoff and Iran’s top diplomat…

Read more

Trump tariffs bring furrowed brows to Ireland’s Botox town

The peak of Croagh Patrick dominates the skyline of Westport, a pretty town on Ireland’s Atlantic coast. Dominating its economy, on the other hand, are the not-so-pretty windowless grey factory…

Read more

The flaky case for buying the dip

Unlock the Editor’s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Either the mighty US mom-and-pop investor base knows something we…

Read more

Leave a Reply