Vehicles wait in line in the drive thru lane of Yum! Brands Inc. Kentucky Fried Chicken (KFC) and Taco Bell restaurants in Lockport, Illinois.
Daniel Acker | Bloomberg | Getty Images
Yum Brands Taco Bell on Wednesday reported quarterly earnings and revenue that topped analysts’ expectations, driven by strong same-store sales growth.
Overall, the restaurant giant saw strong demand in the US for its food, but weaker sales in China once again weighed on KFC and Pizza Hut’s results. After the Chinese government relaxed its zero COVID policy, a wave of new outbreaks has hit the country, affecting the recovery of Yum and other restaurant companies, such as starbucks,
Here’s what Yama reported compared to Wall Street’s expectations, based on a poll of analysts by Refinitiv:
- Earnings per share: $1.31 adjusted versus $1.26 expected
- Revenue: $2.02 billion vs. $1.92 billion expected
Yum reported fourth-quarter net income of $371 million, or $1.29 per share, up from $330 million, or $1.11 per share, a year ago.
Excluding expenses related to its decision to exit Russia and other items, the company earned 1.31 cents per share.
gross sales grew 7% to $2.02 billion. The company’s global same-store sales grew 6% in the quarter, driven by strong diner appetite for Taco Bell.
Taco Bell, typically the strongest performer in Yum’s portfolio, reported same-store sales growth of 11%, beating StreetAccount estimates of 6.7%. The Mexican-inspired chain has most of its locations in the US, though it has been expanding internationally in recent years.
KFC missed Wall Street’s expectations as a weak performance in China weighed on its results. The fried chicken chain reported same-store sales growth of 5%, slightly below estimates of 5.4%. Excluding China, its largest market, KFC’s same-store sales increased by 9%.
Weak sales in China also affected Pizza Hut’s fourth-quarter performance. The pizza chain’s global same-store sales increased 1%, but its international same-store sales declined 1%. Pizza Hut’s US same-store sales rose 4%, a sign that consumers have gotten over pizza fatigue after ordering more during the COVID lockdown.
Yum’s latest addition, Habit Burger Grill, said sales at locations open at least a year fell 1% in the quarter. However, its system sales, which track transactions across all of the chain’s restaurants rather than just locations open every 12 months, climbed 12%, due to Yum’s chain’s rapid expansion.
Shares of the company rose less than 1% in premarket trading.
Read full Yum Brands income report Here.