- Q4 sales and earnings top expectations
- KFC and Taco Bell shine
- Launch of proprietary AI technology
Restaurants group Yum! Brands (YUM:NYSE) bested Wall Street’s revenue and earnings estimates for the fourth quarter on 6 February, sending the shares up by a tenth to a new six month high of $144.
Over the last 12-months shares in the KFC, Pizza Hut and Taco Bell operator have increased by 11%, underperforming the 22% gain seen in the S&P 500 index.
HUNGRY FOR TACO BELL AND KFC
CEO David Gibbs said: ‘Our twin growth engines remain strong with Taco Bell U.S. delivering same-store sales growth of 5% in the fourth quarter, meaningfully outpacing the industry, and KFC International delivering its second consecutive year with over 2,000 net new units.’
Net sales for the quarter climbed 16% to $2.36 billion, slightly outpacing the $2.25 billion pencilled in by analysts, while adjusted EPS (earnings per share) also came in slightly ahead at $1.61, taking the full year to $5.48, equating to 6% year-on-year growth.
Positive like-for-like sales growth of 5% at Taco Bell helped nudge Worldwide same-store sales growth up 1%, ahead of analyst estimates looking for a 0.4% rise. The company credited the strong performance to the brand’s value perception with consumers.
KFC saw same store-sales decline by 5% in the US, reflecting increased competition from Popeyes which has become the second largest fried chicken chain across the US.
It was a different story in China, the biggest market for KFC where system sales increased by 5%. Europe and Latin America reported double-digit system sales growth and Worldwide system sales grew 4%, excluding foreign exchange effects.
BYTE BY YUM!
The company also announced the launch of Byte, its proprietary artificial intelligence driven software platform for its restaurants, which is designed to make it easier for customers to place digital orders and optimise kitchen and delivery services.
Looking ahead Gibbs commented: ‘‘Our advantaged brand position, together with our industry-leading talent, franchisees, and technology, position us for another excellent year in 2025.’
The company reiterated its long-term growth targets to grow the number of units by 5% a year, system sales by 7% and at least 8% growth per year in core operating profit.
