KFC and Pizza Hut owner Yum Brands Inc has recorded a 9% increase in comparable sales and an 18% rise in total revenue for the first quarter of 2021.
Expecting People To Spend Less Per Order As They Start Dining Out Again
Yum, which also owns Taco Bell, said that it expects people to spend less per order as they start dining out again, taking the shine off of an overall increase in demand during the first quarter due to the reopening of major economies.
Although sales at Yum's restaurants fell in 2020 due to COVID-19 closures and capacity restrictions, average expenditure per order jumped as consumers spent more on larger family and combo meals while ordering in.
In general, Yum is seeing a dip in order values as markets reopen, Yum chief financial officer Chris Turner said on a call with analysts.
"We expect ticket [order value] to come down from where it's at [now], but I don't know if it will return to its pre-COVID levels," Turner added.
Online Orders And Return To Restaurants
However, the company said that online orders remain strong and people are returning to restaurants in developed markets, such as the US and the UK, where vaccines are rolling out at a relatively faster pace.
Fresh Government Stimulus Checks
Fresh government stimulus checks have boosted consumer spending at US restaurants, many of which are struggling to hire new workers fast enough to keep up with the jump in sales.
Some Pain In Emerging Markets
Still, Yum CEO David Gibbs warned of some pain in emerging markets where rising infections have led to fresh lockdowns.
"The markets that are struggling are the ones where we have government action that is limiting our ability to trade. In India, we have to close our stores at 3 o'clock in the afternoon. That's obviously going to have an impact on our business," Gibbs said.
Comparable Sales, Total Revenue And Net Income Figures
Yum's 9% increase in comparable sales during the first quarter beat estimates of an 8.6% increase, according to data from Refinitiv IBES.
Total revenue rose 18% to $1.49 billion, above estimates of $1.45 billion. Net income of $1.07 per share also beat Wall Street expectations.