Yum Brands Reported Disappointing First-Quarter Earnings
May 4, 2022 By MarketDepth
Yum Brands (NYSE: YUM) reported disappointing first-quarter earnings Wednesday amid continuous lockdowns in China. Additionally, the company revealed that it would not meet its long-term target for operating profits this year following the suspension of its Russian operations.
Revenue Down Over a $1.5 Billion
The fast food corporation reported earnings of USD1.05 per share, compared to the expected USD1.07 a share. Meanwhile, revenue amounted to USD1.55 Billion, lower than analysts anticipated USD1.59 Billion. Global same-store sales rose 3% within the quarter.
“Our system sales grew 8% despite the difficult operating environment, a testament to the demand for our iconic brands and the unmatched operating capabilities of our world-class franchise partners. We set a Q1 development record, opening nearly 1,000 gross units. Momentum in our digital sales continued in the first quarter as a result of both continued system sales growth and digital mix expansion, reaching a Q1 record of approximately $6 billion.”David Gibbs, CEO
According to the company, KFC same store sales for the quarter, excluding China, was actually up 10%. Though China is KFC’s biggest market through system-wide sales, it is unclear when the country will bounce back. Moreover, Pizza Hut’s U.S. sales also faced its challenges as same-store sales fell 6% in its home market.
“We still see strong demand in the Pizza Hut U.S. business, but it’s primarily a challenge of being able to fill it with the labor challenges around drivers,”CFO Chris Turner said on the company’s conference call with analysts
Taco Bell proved to be the only Yum Brands chain to disclose positive same-store sales growth, reporting 5% versus the expected 2.7%.