KFC-parent Yum Brands Inc YUM.N has reported quarterly comparable sales that beat estimates, driven by strong online demand for its tacos and fried chicken as well as new offerings across its restaurants.
Special Menu Items And Firm Purchases
To attract more customers, Yum recently launched special menu items, such as a crispy chicken sandwich taco at Taco Bell, a Detroit-style pizza at Pizza Hut and a plant-based imitation of its fried chicken at KFC.
Yum also bought three firms that focus on digital ordering, consumer insights and automation of the kitchen flow over the past few months.
Statement By CEO
"The (strong digital numbers are) evidence that those investments are paying off," chief executive officer David Gibbs said on an earnings call.
Digital Business And Comparable Sales
Yum nearly doubled its digital business from pre-COVID-19 pandemic levels, saying that the growth suggests a "more permanent shift to digital channels". Comparable sales jumped 5%, topping estimates of 4.5%, according to Refinitiv data.
Statement By Cowen Analysts
"Taco Bell remains the crown jewel in Yum's portfolio," Cowen analysts said in a note.
Taco Bell And KFC Same-Store Sales
Same-store sales at Taco Bell increased 8%, while that of KFC rose 5% in the fourth quarter ended 31 December. Analysts were expecting them to increase 6.1% and 4.1%, respectively.
Statement By Grubbrr CEO
Taco Bell has performed the best because the chain has been the most aggressive of Yum's top three brands in adopting digital technology, CEO of self-ordering technology provider Grubbrr Sam Zeitz said.
Yum shares rose 3.5% to $129.30.
Adjusted Earnings Per Share
However, Yum's adjusted earnings per share stood at $1.02, below estimates of $1.09.
Higher Costs, Labour Shortage, Total Net Costs And Expenses
Restaurants have been hit by higher costs due to record inflation and a labour shortage in the United States. Yum's total net costs and expenses rose 10% to $1.39 billion.
Warning By CFO
Chief financial officer Chris Turner warned general and administrative expenses will pressure profit in the first six months of 2022 before abating in the second half.