Taco Bell owner Yum Brands earnings top estimates, despite blow of international Covid restrictions

Yum Brands on Thursday reported quarterly earnings and revenue that topped analyst predictions, despite international dining room closures weighing on same-store sales growth at KFC and Pizza Hut.

Shares of the company rose 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: $1.15, adjusted, vs. $1.01 expected
• Revenue: $1.74 billion vs. $1.72 billion expected

Yum reported fiscal fourth-quarter net income of $332 million, or $1.08 per share, down from $488 million, or $1.58 per share, a year earlier.

Excluding items, the company earned $1.15 per share, beating the $1.01 per share expected by analysts surveyed by Refinitiv.

Net sales rose 3% to $1.74 billion, topping expectations of $1.72 billion. Worldwide, the company’s same-store sales fell 1% during the quarter, and Taco Bell was its only brand to report positive same-store sales growth.

Taco Bell’s same-store sales rose 1% in the quarter. The majority of its locations are in the U.S., where fast-food chains have bounced back quickly from the health crisis.

KFC saw its overall same-store sales shrink by 2%. Its U.S. same-store sales climbed by 8%, but its international locations saw sales at restaurants open at least a year fall by 4%. Only 18% of KFC’s sales come from its home market, and China accounts for more of its system sales than the U.S.

Pizza Hut’s same-store sales fell just 1% in the quarter. The coronavirus pandemic has accelerated its U.S. turnaround, helping it cement its reputation for delivery and takeout, rather than dining in. U.S. same-store sales for the pizza chain rose 8% in the quarter. However, outside the U.S., Pizza Hut is taking longer to recover, and its international same-store sales fell 7%.

The Habit Burger Grill, which was acquired by Yum last year, reported same-store sales declines of 5%. The burger chain is much smaller than Yum’s other brands.

Yum added 227 net new restaurants during the quarter. Pizza Hut was the company’s only brand to close more locations than it opened.

Read the full report here.