Restaurant

KFC And Pizza Hut Owner Yum Brands Beats Market Expectations For Second-Quarter Results

By Dave Simpson
KFC And Pizza Hut Owner Yum Brands Beats Market Expectations For Second-Quarter Results

Yum Brands Inc has beaten market expectations for second-quarter results as new menu items and steady online demand boosted sales at KFC and Pizza Hut in the United States.

Shares of the Taco Bell parent rose approximately 4%, hitting a record high, as comparable sales at its KFC division increased 30% in the second quarter, above estimates, helped by the easing of pandemic-induced restrictions in the United States.

Rewards Programmes, New Menu Items And Digital Sales

Major US fast-food restaurants, including Yum's chains, McDonald's and Starbucks, have been investing in their rewards programmes and launching new dishes to keep customers coming back even as full-service rivals reopen.

Yum has launched a new chicken sandwich, Detroit-style pizza and menu items made using Beyond Meat's plant-based protein, while also acquiring technology firms, including Tictuk Tech, to improve its digital business.

In the second quarter ended June 30, digital sales rose 35% to over $5 billion, with Yum Brands CEO David Gibbs telling analysts that all of Yum's chains "are very rapidly becoming digital brands".

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"Digital is one of those things that has no downside...The average check is higher. There's labour savings from processing orders on digital," Gibbs added on the earnings call.

Same-Store Sales, Overall Net Income, Earning Per Share And Comparable Sales

Same-store sales at KFC and Pizza Hut were also above pre-pandemic levels in the United States, cushioning the blow from declines in their international segments due to renewed coronavirus curbs in certain countries.

Overall net income rose 90% from a year earlier to $391 million. Excluding items, Yum earned $1.16 per share, surpassing estimates of 96 cents.

Comparable sales rose 23%, beating estimates of a 20.5% increase, according to IBES data from Refinitiv.

New Restaurant Openings

Yum also said that it opened a record 603 net new restaurants across its brands, including in China and India, raising its long-term store growth forecast to between 4% and 5% from 4%.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.