Yum Brands, the parent company of KFC, Pizza Hut, Taco Bell and The Habit Burger Grill, reported its second-quarter earnings on Tuesday, August 2, 2023. The company beat analysts’ expectations on both revenue and earnings per share, as sales surged across its brands amid the easing of pandemic restrictions and the recovery of consumer demand.
Yum Brands’ key financial results
According to the company’s press release, Yum Brands achieved the following results for the second quarter ended June 30, 2023:
- Revenue of $1.84 billion, up 34% year-over-year and above the consensus estimate of $1.80 billion.
- Earnings per share (EPS) of $1.16, up 89% year-over-year and above the consensus estimate of $0.96.
- Same-store sales growth of 23%, compared to a decline of 15% in the same period last year.
- Net income of $391 million, up 89% year-over-year.
- Operating margin of 31.9%, up 6.4 percentage points year-over-year.
The company also raised its full-year guidance for EPS growth to at least 14%, up from its previous range of 11% to 13%.
Yum Brands’ performance by segment
Yum Brands operates four segments: KFC, Pizza Hut, Taco Bell and The Habit Burger Grill. All four segments reported positive same-store sales growth in the second quarter, as well as increased revenue and operating profit.
- KFC: Same-store sales growth of 30%, revenue of $787 million (up 37% year-over-year), operating profit of $299 million (up 75% year-over-year).
- Pizza Hut: Same-store sales growth of 10%, revenue of $281 million (up 18% year-over-year), operating profit of $77 million (up 35% year-over-year).
- Taco Bell: Same-store sales growth of 21%, revenue of $609 million (up 35% year-over-year), operating profit of $217 million (up 63% year-over-year).
- The Habit Burger Grill: Same-store sales growth of 31%, revenue of $163 million (up 49% year-over-year), operating profit of $12 million (up 1400% year-over-year).
Yum Brands’ outlook and strategy
Yum Brands’ CEO David Gibbs said in a statement that the company’s strong second-quarter results reflect its “resilient business model” and its “ability to adapt and innovate in a rapidly changing environment”. He also said that the company is “confident in our strategies to drive sustainable long-term growth” and that it is “well-positioned to capitalize on the global demand for our iconic brands”.
Some of the key strategies that Yum Brands is pursuing to achieve its growth objectives include:
- Expanding its digital capabilities and delivery channels, such as online ordering, mobile apps, loyalty programs, kiosks and third-party platforms.
- Accelerating its unit development and franchisee growth, especially in emerging markets where there is high potential for penetration and scale.
- Leveraging its scale and diversity to optimize its cost structure and drive operational excellence across its brands.
- Investing in its people and culture to foster a high-performance and inclusive organization that attracts and retains talent.
- Enhancing its social and environmental responsibility by focusing on areas such as food quality, animal welfare, diversity and inclusion, community engagement and climate action.
