Yum Brands misses estimates as Russian exit and FX weigh heavily on sales – Yahoo Finance | Omd Cialis

Editor’s Note: This post is broken and will be updated

Yum Brands (YUM), the parent company of KFC, Taco Bell and Pizza Hut, reported second-quarter earnings that fell short of expectations as lockdowns in China and an exit from Russia weighed on sales on top of macroeconomic drags like inflation and FX .

Here are Yum Brand’s second-quarter results compared to Wall Street consensus estimates compiled by Bloomberg:

  • Revenue: $1.64 billion versus $1.65 billion expected

  • Adj. earnings per share (EPS): $1.05 vs. $1.09 expected

  • Global same-store sales: 1% growth versus 0.75% expected growth

The lockdowns in China have severely dragged down comparable sales worldwide. Ex-China, the company reported same-store sales growth of 6%.

On a business unit basis, same-store sales were also weak — with the exception of Taco Bell, which is relatively insulated from overseas printing compared to KFC and Pizza Hut.

KFC missed same-store sales estimates for the quarter (-1% vs. +0.45% exp.). decrease by 4 percentage points.

KFC’s same-store sales outside of China rose 7%, the company said. China is KFC’s largest market by system-wide sales at 27%. It’s the second largest for Pizza Hut at 16%.

Pizza Hut reported a stronger-than-expected same-store sales loss of -3% versus -1.04% expected.

Persistent staff shortages, including a recent shortage of delivery drivers, hampered its ability to meet demand. Yum also removed 53 units in Russia from the worldwide count of Pizza Hut units.

Excluding China, Pizza Hut International’s same-store sales rose 6%.

Taco Bell was the only company to beat estimates, with global same-store sales up 8% versus +4.03% expected, helped by the return of Mexican pizza and strong international growth.

Taco Bell US system sales rose 9%, while Taco Bell International system sales rose a whopping 31%.

Shares were relatively flat in premarket trading.

“Our systems revenue increased 5% in the second quarter excluding Russia, driven by continued development momentum. Despite a complex operating environment and the strongest same-store sales growth in our history, our global business continues to perform well,” said David Gibbs, Yum’s CEO in a press release, citing Taco Bell’s impressive same-store sales results.

Despite the lackluster quarter, there is cautious optimism that the company can recover in the second half of the year.

Last month, Goldman Sachs (GS) issued a double upgrade on the stock, setting a buy rating with a price target of $135 per share (down from $125).

Analyst Jared Garber claimed that the fast-food conglomerate’s high franchise mix and strong growth of its units may help offset macro volatility. He added that technology remains a positive lifeline, recognizing the brand’s digital advances.

The company reported nearly $6 billion in digital systems sales in the second quarter.

Over the past three years, Yum has “acquired multiple digital/technology companies that are helping to drive both operational improvements in the restaurant and more targeted marketing options,” the analyst wrote.

“We see these investments as a recipe for success for continued growth of the units and [same-store sales] grow while helping to improve franchisee operations and profits and drive growth opportunities for YUM’s platform business,” he continued.

Yum Brands announced that Taco Bell will increase its international presence as the brand leans on popular menu items like Mexican pizza.

Another bright spot in the coming quarters? Innovation.

A greater emphasis on new product launches and the return of fan-favorite menu items — like KFC’s chicken nuggets and Taco Bell’s Mexican pizza (which served as a permanent menu item on September 15) — has helped boost demand as innovation in the fast-food space slows overall.

Nationwide visits to Taco Bell surged immediately after Mexican pizza was reintroduced in May, according to pedestrian analytics platform Placer.ai. Meanwhile, KFC locations in Charlotte, North Carolina (where the Nuggets are currently being tested) saw an increase in traffic patterns during the week of the launch.

The company said during its most recent conference call that it is on track with earlier expectations for core operating profit growth in the high teens in the second half.

Yum Brands’ shares are down about 10% year-to-date.

Alexandra is Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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