Yum Brands reported second-quarter adjusted earnings of $1.44 a share, up 7% from a year earlier but just shy of the $1.46 analysts expected. Revenue rose 2% to $1.93 billion, also narrowly missing forecasts, as weaker-than-anticipated growth at KFC and Taco Bell limited gains. Comparable sales increased 2% worldwide versus the 2.37% consensus. System sales—an indicator that includes franchise locations—grew 4% excluding currency effects, led by Taco Bell’s 6% advance and a 5% rise at KFC. In the United States, however, same-store sales fell 5% at both KFC and Pizza Hut and 4% at The Habit Burger Grill, while Taco Bell managed a 4% increase. Management attributed the U.S. softness at KFC and Pizza Hut to “inconsistent” value messaging. The company said 57% of transactions now come through digital channels, seven percentage points more than a year ago, and noted that restaurants testing voice-activated ordering are experiencing lower staff turnover. Yum reiterated plans to add its Saucy fried-chicken concept in Orlando later this year and said Taco Bell’s new Crispy Chicken Nuggets will become a permanent platform in 2026. Despite inflation in building products sourced from Mexico and Canada, the group does not expect cost pressures to derail its expansion strategy.
Taco Bell is apparently taking some customers from fast-casual chains, per $YUM.
Taco Bell has not had a negative week this year. Yum Brands noting that the company is growing sales and transactions across all incomes. $YUM
Interesting comments from Yum on voice AI, which is being tested at Taco Bell locations. Restaurants with that technology have lower turnover, apparently because the AI makes the ordering process smoother. $YUM