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YUM! Brands, Inc. (YUM - Free Report) reported lackluster third-quarter 2024 results, with adjusted earnings and total revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the bottom line declined, while the top line grew.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Following the earnings release, YUM stock inched up 0.3% in the pre-market trading session on Tuesday.
The top-line performance reflects solid contributions from the company’s Taco Bell and KFC divisions. The increased unit growth in KFC International added to the uptrend of this division. Yet, the uptrend was offset to some extent by soft contributions from the Pizza Hut division. The worldwide comps declined 2% year over year.
Moreover, increased company restaurant expenses and franchise and property expenses marred the bottom line. Also, unfavorable foreign currency translation impacted the quarter’s performance.
Nonetheless, increased new unit counts, drive-thru Voice AI technology expansion at Taco Bell and other strategic initiatives are likely to aid the company’s performance in upcoming quarters amid the ongoing geopolitical conflicts and challenged consumer sentiment.
YUM’s Earnings and Revenue Discussion
Adjusted earnings per share (EPS) of $1.37 missed the Zacks Consensus Estimate of $1.41 by 2.8%. In the prior-year quarter, the company reported an adjusted EPS of $1.44.
Quarterly revenues of $1.826 billion also missed the consensus mark of $1.889 billion by 3.3% but grew 7% year over year.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
Worldwide system sales — excluding foreign currency translation — increased 1% year over year, with Taco Bell rising 5% and KFC rising 1%. The metric declined 1% year over year for Pizza Hut.
Divisional Performance of YUM
YUM! Brands primarily announces results under four divisions, KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
KFC: Revenues at the KFC division totaled $785 million, up 12% year over year. Our model predicted the metric to increase 8.3% from a year ago. Comps decreased 4% year over year against a gain of 6% reported in the prior-year quarter.
The division’s operating margin contracted 610 basis points (bps) year over year to 43.1%. In the quarter, the KFC division opened 685 gross new restaurants across 65 countries.
Pizza Hut: This division’s revenues amounted to $238 million, down 1% year over year. Our model predicted the metric to increase 3.4% from the prior-year level. Comps decreased 4% year over year against growth of 1% in the year-ago quarter.
The division’s operating margin contracted 200 bps year over year to 38.3%. Pizza Hut division opened 292 gross new restaurants across 36 countries.
Taco Bell: The quarterly revenues of this division were $666 million, up 6% year over year. Our model precited the metric to increase 9% from the year-earlier level. Comps increased 4% year over year compared with 8% in the prior-year quarter.
The division’s operating margin expanded 160 bps year over year to 37.6%. Taco Bell opened 49 gross new restaurants across 15 countries.
Habit Burger Grill: The division’s revenues amounted to $137 million, flat year over year. Our model predicted the metric to increase 21.6% year over year.
Comps declined 5% year over year. In the quarter, the division opened three gross new restaurants.
Other Financial Details of YUM! Brands
As of Sept. 30, 2024, the company’s cash and cash equivalents totaled $457 million compared with $512 million at 2023-end. Long-term debt, as of the end of the third quarter, was $11.169 billion compared with $11.142 billion at 2023-end.
Shake Shack Inc. (SHAK - Free Report) posted third-quarter fiscal 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. The top and bottom lines also increased on a year-over-year basis.
In the quarter, the company ramped up its investment in marketing strategies and programs aimed at increasing guest engagement and brand awareness, even amid a challenging market environment. These efforts have paid off as it has achieved some of the highest brand awareness levels on record, which, in turn, are fueling robust sales and profitability growth.
Starbucks Corporation (SBUX - Free Report) reported fourth-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate but revenues missing the same. The bottom and top lines declined year over year.
Global comparable store sales declined 7% year over year. The downside was backed by a decrease of 8% in comparable transactions, partially overshadowed by a 2% increase in average tickets. During the quarter, SBUX opened 722 net new stores worldwide, bringing the total store count to 40,199.
Brinker International, Inc. (EAT - Free Report) reported first-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased from the prior-year figures.
EAT gained from the solid performance of Chili's. The upside was backed by favorable comparable restaurant sales driven by menu pricing, higher traffic and a favorable menu item mix. The segment’s company-owned comps rose 14.1% from the year-ago quarter’s level. The company projects fiscal 2025 earnings per share to be in the range of $5.2-$5.5, up from the prior estimate of $4.35-$4.75.
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YUM! Brands' Q3 Earnings & Revenues Lag, Worldwide Comps Decline
YUM! Brands, Inc. (YUM - Free Report) reported lackluster third-quarter 2024 results, with adjusted earnings and total revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the bottom line declined, while the top line grew.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Following the earnings release, YUM stock inched up 0.3% in the pre-market trading session on Tuesday.
The top-line performance reflects solid contributions from the company’s Taco Bell and KFC divisions. The increased unit growth in KFC International added to the uptrend of this division. Yet, the uptrend was offset to some extent by soft contributions from the Pizza Hut division. The worldwide comps declined 2% year over year.
Moreover, increased company restaurant expenses and franchise and property expenses marred the bottom line. Also, unfavorable foreign currency translation impacted the quarter’s performance.
Nonetheless, increased new unit counts, drive-thru Voice AI technology expansion at Taco Bell and other strategic initiatives are likely to aid the company’s performance in upcoming quarters amid the ongoing geopolitical conflicts and challenged consumer sentiment.
YUM’s Earnings and Revenue Discussion
Adjusted earnings per share (EPS) of $1.37 missed the Zacks Consensus Estimate of $1.41 by 2.8%. In the prior-year quarter, the company reported an adjusted EPS of $1.44.
Quarterly revenues of $1.826 billion also missed the consensus mark of $1.889 billion by 3.3% but grew 7% year over year.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
Yum! Brands, Inc. price-consensus-eps-surprise-chart | Yum! Brands, Inc. Quote
Worldwide system sales — excluding foreign currency translation — increased 1% year over year, with Taco Bell rising 5% and KFC rising 1%. The metric declined 1% year over year for Pizza Hut.
Divisional Performance of YUM
YUM! Brands primarily announces results under four divisions, KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
KFC: Revenues at the KFC division totaled $785 million, up 12% year over year. Our model predicted the metric to increase 8.3% from a year ago. Comps decreased 4% year over year against a gain of 6% reported in the prior-year quarter.
The division’s operating margin contracted 610 basis points (bps) year over year to 43.1%. In the quarter, the KFC division opened 685 gross new restaurants across 65 countries.
Pizza Hut: This division’s revenues amounted to $238 million, down 1% year over year. Our model predicted the metric to increase 3.4% from the prior-year level. Comps decreased 4% year over year against growth of 1% in the year-ago quarter.
The division’s operating margin contracted 200 bps year over year to 38.3%. Pizza Hut division opened 292 gross new restaurants across 36 countries.
Taco Bell: The quarterly revenues of this division were $666 million, up 6% year over year. Our model precited the metric to increase 9% from the year-earlier level. Comps increased 4% year over year compared with 8% in the prior-year quarter.
The division’s operating margin expanded 160 bps year over year to 37.6%. Taco Bell opened 49 gross new restaurants across 15 countries.
Habit Burger Grill: The division’s revenues amounted to $137 million, flat year over year. Our model predicted the metric to increase 21.6% year over year.
Comps declined 5% year over year. In the quarter, the division opened three gross new restaurants.
Other Financial Details of YUM! Brands
As of Sept. 30, 2024, the company’s cash and cash equivalents totaled $457 million compared with $512 million at 2023-end. Long-term debt, as of the end of the third quarter, was $11.169 billion compared with $11.142 billion at 2023-end.
YUM’s Zacks Rank & Recent Retail-Wholesale Releases
YUM! Brands currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shake Shack Inc. (SHAK - Free Report) posted third-quarter fiscal 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate. The top and bottom lines also increased on a year-over-year basis.
In the quarter, the company ramped up its investment in marketing strategies and programs aimed at increasing guest engagement and brand awareness, even amid a challenging market environment. These efforts have paid off as it has achieved some of the highest brand awareness levels on record, which, in turn, are fueling robust sales and profitability growth.
Starbucks Corporation (SBUX - Free Report) reported fourth-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate but revenues missing the same. The bottom and top lines declined year over year.
Global comparable store sales declined 7% year over year. The downside was backed by a decrease of 8% in comparable transactions, partially overshadowed by a 2% increase in average tickets. During the quarter, SBUX opened 722 net new stores worldwide, bringing the total store count to 40,199.
Brinker International, Inc. (EAT - Free Report) reported first-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased from the prior-year figures.
EAT gained from the solid performance of Chili's. The upside was backed by favorable comparable restaurant sales driven by menu pricing, higher traffic and a favorable menu item mix. The segment’s company-owned comps rose 14.1% from the year-ago quarter’s level. The company projects fiscal 2025 earnings per share to be in the range of $5.2-$5.5, up from the prior estimate of $4.35-$4.75.