Signage is displayed outside a Yum! Brands Inc. Taco Bell restaurant in Lockport, Illinois.
Daniel Acker | Bloomberg | Getty Images
Yum Brands on Thursday reported that its quarterly revenue rose 8%, fueled by Taco Bell’s return to positive same-store sales growth.
Shares of the company fell less than 1% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.01, adjusted, vs. 80 cents expected
- Revenue: $1.45 billion vs. $1.42 billion expected
Yum reported third-quarter net income of $283 million, or 92 cents per share, up from $255 million, or 81 cents per share, a year earlier.
Yum’s investment in Grubhub lifted earnings per share by 2 cents this quarter due to changes in its fair value. The KFC owner, which had disputed the terms of the agreement with Grubhub this summer, also said it sold its 3% stake for $206 million. The investment gave Yum a seat on Grubhub’s board, giving it a front seat to watch how third-party delivery companies operated. Executives said that the sale didn’t impact their view on the delivery space in general.
Excluding expenses from items including a voluntary early retirement program and restructuring, the company earned $1.01 per share, topping the 80 cents per share expected by analysts surveyed by Refinitiv.
Net sales of $1.45 billion was 8% higher than a year earlier, beating expectations of $1.42 billion. Same-store sales across Yum fell 2%, but the company’s digital sales set a record for a quarter, reaching $4 billion.
Taco Bell reported same-store sales growth of 3%. Last quarter, the chain saw its same-store sales fall 8%, hurt by lower demand from early morning and late-night customers.
Yum’s other brands reported same-store sales declines in the quarter. KFC’s and Pizza Hut’s results were dragged down by lagging demand in their international markets. KFC’s global same-store sales fell 4%, despite U.S. same-store sales growth of 9%. Pizza Hut reported global same-store sales declines of 3%. The pizza chain’s quarterly same-store sales rose 6% in the United States.
Habit Burger Grill, which Yum bought earlier this year, saw same-store sales fall 3% in the quarter.
Yum’s third quarter also included 267 net restaurant closures. Compared with the same time a year ago, its restaurant footprint was up 2%. Pizza Hut’s restaurant count fell 4% from the year-ago period after closures that included hundreds of stores owned by NPC International, its largest U.S. franchisee, which filed for Chapter 11 bankruptcy earlier this year.