Yum Brands Reports Quarterly Earnings Slightly Below Expectations Despite KFC and Pizza Hut China Sales Rebound

Yum Brands Reports Quarterly Earnings Slightly Below Expectations Despite KFC and Pizza Hut China Sales Rebound

Yum Brands, the parent company of KFC, Pizza Hut, and Taco Bell, has reported quarterly earnings that fell slightly short of analysts’ expectations. The company reported net income of $300 million, or $1.05 per share, which is down from $399 million, or $1.36 per share, from the previous year. The company reported earnings per share of $1.06, which is seven cents lower than expected due to a decrease in the value of investments, and an additional eight cents per share due to foreign currency.

China Sales Rebound for KFC and Pizza Hut

Despite the earnings shortfall, KFC and Pizza Hut in China reported sales growth. KFC’s same-store sales rose by 9%, and Pizza Hut’s same-store sales rose by 7%. KFC’s largest market is in China, where system sales increased by 17%, contributing to the chain’s international same-store sales growth of 11%. Pizza Hut’s second-largest market is also in China, where system sales increased by 24%. The company’s same-store sales in China grew by 8%. Digital sales exceeded 45% of transactions, according to CEO David Gibbs.

Yum Brands Expands and Exits Russian Market

Yum Brands opened 746 new locations during the quarter, with Taco Bell seeing the largest increase in openings as the chain focused on expanding internationally. The company also exited the Russian market through the sale of KFC restaurants to Smart Service, an existing Russian franchisee. The company had already sold its Pizza Hut locations there to a local operator last summer following Moscow’s invasion of Ukraine. Yum Brands will not face any comparisons that include its Russian business next quarter as the company suspended operations there in early March last year.

Yum Brands joins a growing list of companies, including Procter & Gamble and Starbucks, that have reported a sales rebound in China. Despite the earnings shortfall, Yum Brands remains optimistic about its future growth, particularly in China and with the expansion of its Taco Bell chain.

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