KFC & Pizza Hut Parent Yum! Brands Miss Q3 Targets, Blames Geopolitical And Consumer Hurdles
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Yum! Brands, Inc. (NYSE:YUM) shares are trading relatively flat in the premarket session on Tuesday.
The company reported third-quarter adjusted earnings per share of $1.37 missing the street view of $1.41.
Yum! Brands reported a 4% increase in same-store sales for Taco Bell in the U.S. and a 9% growth in international unit sales for KFC. The company’s quarterly revenues of $1.826 billion missed the analyst consensus of $1.899 billion.
Yum! Brands saw a 5% increase in unit count during the quarter, with 1,029 gross new units added.
The company reported robust digital system sales exceeding $8 billion, with digital sales accounting for more than 50% of the total.
GAAP operating profit grew by 1%, while core operating profit increased by 3%. However, foreign currency translation negatively impacted divisional operating profit by $3 million.
“While sales have been impacted by pressures relating to geopolitical conflicts and challenged consumer sentiment, our iconic brands which are led by our world-class talent and enabled by Yum!’s unmatched scale and cutting-edge, proprietary tech, are positioned for unstoppable growth,” said David Gibbs, CEO.
The company’s KFC Division opened 685 gross new restaurants across 65 countries, Taco Bell Division opened 49 gross new restaurants across 15 countries, Pizza Hut Division opened 292 gross new restaurants across 36 countries, and Habit Burger & Grill Division opened 3 gross new restaurants.
The company exited the quarter with cash and equivalents worth $627 million. As of quarter-end, long-term debt totaled $11.169 billion.
In its conference call, the company said it expects fourth-quarter core operating profit growth to be in the mid-to-high single digits, excluding contribution from 53rd week and noted sales did not meet expectations in key markets of China and the Middle East, tempering expectations in the fourth quarter.
Price Action: YUM shares are trading higher by 0.20% to $133.03 premarket at last check Tuesday.
Photo by aleks-dorohovich- for Unsplash
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