Yum Brands earnings miss estimates as Pizza Hut, KFC sales disappoint

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 more than 4% in premarket 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%.

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.

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

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