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Yum Brands Misses Same-Store Sales And Profit Estimates As Pizza Hut Battles Rivals

Published on Feb 6 2020 3:13 PM in Restaurant tagged: Taco Bell / pizza hut / KFC / Yum Brands

Yum Brands Misses Same-Store Sales And Profit Estimates As Pizza Hut Battles Rivals

Yum Brands Inc has reported quarterly same-store sales and profit that missed market expectations as sales at its Pizza Hut chain in the United States were hurt by stiff competition.

Pizza Hut is struggling to keep its market share amid rivalry from Domino's Pizza and local eateries as well as food-delivery apps that offer a wide selection of restaurants from which to choose.

The pizza chain, which has missed Wall Street expectations for sales growth in six out of the past eight quarters, has been a weak spot for Yum, even as its other chains, KFC and Taco Bell, continue to perform well.

"For so many years, people associated takeout and delivery solely with pizza. And now...these online delivery companies have expanded the universe of what people take into consideration when they order out," Kavar Capital Partners CEO Doug Ciocca said.

"It used to be family on a Friday night, watching a movie and ordering pizza...now they stream a video and can order from an online menu," he said. The firm holds Yum shares.

To fight competition, Pizza Hut has introduced new concepts such as heated lockers that allow diners to pick up online orders from restaurants, and it is testing plant-based meat toppings.

Statistics

Comparable sales at the pizza chain fell 2% in the fourth quarter, which was worse than analysts' expectations of a 0.71% drop, according to IBES data from Refinitiv. Sales were down 4% in the United States, Yum said.

Overall, sales at Yum's restaurants open at least a year climbed 2%, below the Wall Street estimate of 2.26%.

Sales grew 4% at established Taco Bell restaurants and 3% at KFC, both beating estimates.

Net income rose to $488 million, or $1.58 per share, in the fourth quarter ended December 31, from $334 million, or $1.04 per share, a year earlier.

Excluding one-time items, Yum earned $1 per share, missing analysts' estimate by 13 cents.

Total revenue rose 8.7% to $1.69 billion, above the estimate of $1.66 billion.

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

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