Yum Brands revenue slumps as KFC, Pizza Hut – Business News
Yum Brands on Tuesday reported disappointing revenue as its KFC and Pizza Hut eating places suffered a dismal gross sales droop within the US.
The company reported adjusted earnings per share of $1.44, lacking Wall Street estimates of $1.46, and revenue of $1.93 billion, under projections of $1.94 billion.
Colonel Sanders’ well-known fried-chicken franchise has been struggling for months, final yr shedding enough market share to rivals Raising Cane’s and Wingstop that it slipped to the No. 5 chicken chain within the US by gross sales.
KFC’s US same-store gross sales slid 5% within the second quarter. Christopher Sadowski
Yum’s general business – together with outcomes at Pizza Hut – was additionally hit by anxiousness over the economic system that has led customers to grow more cautious and dine out much less.
Net income for the company – which additionally owns Taco Bell, usually its star performer – hit $374 million, or $1.33 per share, within the second quarter, up from $367 million the yr earlier than.
The company’s general same-store gross sales, which solely tracks eating places open at the least 12 months, jumped 2% during the quarter.
“I’m proud that Yum Brands delivered another strong quarter in a tough consumer environment,” CEO David Gibbs mentioned Tuesday.
It was his remaining earnings call forward of his retirement in October, when chief financial officer Chris Turner will take the helm.
Same-store gross sales at world KFC eating places rose 2% – however within the US, it slid 5%.
Though the chain has tried to spice up gross sales with worth choices and new menu objects, the choices haven’t resonated with prospects, executives mentioned Tuesday.
Pizza Hut’s US same-store gross sales plunged 5% in the latest quarter. Los Angeles Times through Getty Images
Meanwhile, Pizza Hut’s world same-store gross sales fell 1% and its US same-store gross sales plunged 5% within the second quarter.
It was equally damage by an “insufficient value message,” in line with Gibbs, as American prospects flock to meal offers and worth menus.
The company is speeding to put out new promotions, Gibbs added.
Taco Bell reported same-store gross sales growth of 4%, although that got here in under estimates of 5.2%. Christopher Sadowski
Taco Bell helped enhance Yum’s earnings, reporting same-store gross sales growth within the US and internationally of 4% due to the success of its re-launch of Crispy Chicken Nuggets.
Its general chicken gross sales have climbed 50% over the previous two years as it has snapped up market share from different fast-food chains, Gibbs mentioned.
“Most people are reporting negative quarters. We haven’t even had a negative week for Taco Bell,” Gibbs mentioned Tuesday.
In the second quarter, Yum’s restaurant depend throughout its corporations rose 3% with 871 new areas – largely worldwide KFC eating places.
