Yum Brands Misses Revenue Target as Pizza Hut, KFC See Lower Sales

By Thea Felicity

Aug 06 2024, 18:30 PM EDT

Customers walk in to a KFC restaurant during lunchtime April 19, 2012 in Los Angeles, California. Yum Brands Inc., the parent company of KFC, Taco Bell and Pizza Hut chains, reported dramatically strong first quarter earnings. Kevork Djansezian/Getty Images

Yum Brands, the parent company of popular fast-food chains like Pizza Hut, KFC, and Taco Bell, reported mixed results for the second quarter.

CNBC reported that while the company's earnings per share slightly surpassed Wall Street expectations at $1.35, revenue fell short, coming in at $1.76 billion compared to the anticipated $1.8 billion. This performance was primarily driven by a decline in same-store sales for Pizza Hut and KFC, which faced significant challenges both in the United States and internationally.

Yum Brands Fast-Food Chains Sales

KFC, known for its fried chicken, experienced a 3% drop in same-store sales globally. In the US, the chain struggled with a 5% decline, attributed to changing consumer spending habits and economic pressures.

Pizza Hut faced similar issues, with US same-store sales decreasing by 1% and international sales falling by 4%. These declines contributed to a 1% overall decrease in Yum's same-store sales for the quarter.

In contrast, Taco Bell, often considered the jewel in Yum Brands' portfolio, reported a solid 5% increase in same-store sales. The chain's strong performance was largely due to its value offerings, which resonated well with cost-conscious consumers across all income levels.

To tail on this success, VCPost shared that Yum Brands will expand the use of artificial intelligence in Taco Bell drive-thrus, aiming to implement the technology in hundreds of U.S. locations by the end of the year.

However, Yum Brands also faced operational challenges beyond sales performance. The company has temporarily closed around 200 restaurants across the Middle East, Malaysia, and Indonesia due to ongoing regional conflicts.

Chief Financial Officer Chris Turner mentioned that some of these locations might reopen later this month, but there remains a risk that others could close permanently if the situation worsens.