Yum Brands quarterly revenue rises 8%, fueled by higher Taco Bell demand

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.

Read the full earnings report here.