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Taco Bell parent earnings beat, fueled by strong demand for KFC

Vehicles wait in line at the drive through lane of a Yum! Brands Inc. Kentucky Fried Chicken (KFC) and Taco Bell restaurant in Lockport, Illinois, U.S.

Daniel Acker | Bloomberg | Getty Images

Yum Brands on Thursday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by strong demand for KFC’s fried chicken.

Shares of the company rose more than 1% in premarket trading.

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

  • Earnings per share: $1.22 adjusted vs. $1.08 expected
  • Revenue: $1.61 billion vs. $1.59 billion expected

The company reported fiscal third-quarter net income of $528 million, or $1.75 per share, up from $283 million, or 92 cents per share, a year earlier.

Excluding items, Yum earned $1.22 per share, beating the $1.08 per share expected by analysts surveyed by Refinitiv.

Net sales rose 11% to $1.61 billion, topping expectations of $1.59 billion. Across all of its chains, same-store sales increased by 5%. Wall Street was expecting same-store sales growth of 5.8%, according to StreetAccount estimates. The global spread of the Covid delta variant weakened demand for Yum’s pizza, chicken and tacos in some of its key markets.

KFC’s same-store sales climbed 6% after falling 4% a year ago. While growth in China, its largest market, was muted during the quarter, its home market saw same-store sales climb 4%. On a two-year basis, U.S. same-store sales were up 13%.

Pizza Hut reported same-store sales growth of 4% as international markets bounced back. In the United States, its same-store sales rose by just 2% as it faced tough comparisons to a year ago. On a two-year basis, Pizza Hut’s U.S. same-store sales are up 8%.

Taco Bell’s same-store sales rose 5% in the quarter and 8% on a two-year basis. The chain has struggled to recover late-night and breakfast sales throughout the pandemic. The Mexican-inspired chain’s same-store sales had the biggest miss of Yum’s portfolio. StreetAccount estimates forecast that the chain would report same-store sales growth of 6.2%.

Yum added 760 net new locations during the quarter, setting a record for the company.

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