Yum Brands, the parent company of popular fast-food chains KFC, Taco Bell, and Pizza Hut, recently released their quarterly earnings report, which showed weaker-than-expected sales. This news comes as a setback for the fast-food giant, as Yum is the third global restaurant giant to report disappointing revenue for the last three months of 2023, following Starbucks and McDonald’s.
The disappointing results caused Yum’s stock to fall more than 1% in premarket trading. Analysts had predicted an earnings per share of $1.40, but Yum fell short, reporting $1.26 adjusted. Similarly, revenue was expected to reach $2.11 billion, but Yum only managed to bring in $2.04 billion.
Despite these underwhelming results, there were still some positives in the report. Net sales did rise by 1% to $2.04 billion, and global same-store sales increased by the same percentage. However, Pizza Hut reported a 2% decline in same-store sales, missing the expected 0.6% growth. KFC saw a modest 2% rise in same-store sales, which fell short of StreetAccount estimates of 4.7%. Taco Bell also underperformed with 3% same-store sales growth, compared to StreetAccount estimates of 3.8%.
Looking ahead, Yum remains optimistic about its future prospects. The company has ambitious plans for 2024, aiming to reach major milestones including surpassing 60,000 locations worldwide. This would include over 30,000 KFC restaurants and more than 20,000 Pizza Hut locations.
Yum Brands will now be closely watching their competitors as they navigate the challenges of the global market. With Starbucks and McDonald’s also reporting disappointing revenue, the fast-food industry as a whole may need to adapt to changing consumer demands and economic conditions in order to stay competitive in the coming months.
