Yum Brands revenue slumps as KFC, Pizza Hut struggle

Yum Brands income slumps as KFC, Pizza Hut battle

Yum Brands on Tuesday reported disappointing income as its KFC and Pizza Hut eating places suffered a dismal gross sales hunch within the US.

The firm reported adjusted earnings per share of $1.44, lacking Wall Street estimates of $1.46, and income of $1.93 billion, below projections of $1.94 billion.

Colonel Sanders’ well-known fried-chicken franchise has been struggling for months, last yr shedding sufficient market share to rivals Raising Cane’s and Wingstop that it slipped to the No. 5 rooster chain within the US by gross sales.

KFC’s US same-store gross sales slid 5% within the second quarter. Christopher Sadowski

Yum’s total enterprise – including outcomes at Pizza Hut – was also hit by anxiousness over the economic system that has led customers to develop more cautious and dine out less.

Net earnings for the corporate – which also owns Taco Bell, usually its star performer – hit $374 million, or $1.33 per share, within the second quarter, up from $367 million the yr before.

The firm’s total same-store gross sales, which only tracks eating places open no less than 12 months, jumped 2% during the quarter.

“I’m proud that Yum Brands delivered another strong quarter in a tough consumer environment,” CEO David Gibbs said Tuesday.

It was his remaining earnings name forward of his retirement in October, when chief monetary officer Chris Turner will take the helm.

Same-store gross sales at global KFC eating places rose 2% – however within the US, it slid 5%.

Though the chain has tried to spice up gross sales with worth choices and new menu gadgets, the choices haven’t resonated with prospects, executives said Tuesday.

Pizza Hut’s US same-store gross sales plunged 5% within the most current quarter. Los Angeles Times by way of Getty Images

Meanwhile, Pizza Hut’s global same-store gross sales fell 1% and its US same-store gross sales plunged 5% within the second quarter.

It was equally damage by an “insufficient value message,” according to Gibbs, as American prospects flock to meal offers and worth menus.

The firm is speeding to place out new promotions, Gibbs added.

Taco Bell reported same-store gross sales progress of 4%, though that got here in below estimates of 5.2%. Christopher Sadowski

Taco Bell helped enhance Yum’s earnings, reporting same-store gross sales progress within the US and internationally of 4% because of the success of its re-launch of Crispy Chicken Nuggets.

Its total rooster gross sales have climbed 50% over the past two years because it has snapped up market share from other fast-food chains, Gibbs said.

“Most people are reporting negative quarters. We haven’t even had a negative week for Taco Bell,” Gibbs said Tuesday.

In the second quarter, Yum’s restaurant depend across its firms rose 3% with 871 new areas – principally worldwide KFC eating places.

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