Yum! Brands, Inc. Reports Third Quarter 2024 Financial Results
Overview
Yum! Brands, Inc. (NYSE: YUM) has announced its financial results for the third quarter, which ended on September 30, 2024. The company's performance reflects various emerging trends and a robust strategy amidst a complex consumer landscape.
Key Financial Metrics
| Metric | Q3 2024 Results | Consensus Estimates |
|---|---|---|
| GAAP EPS | $1.35 | $1.41 |
| EPS (excluding Special Items) | $1.37 | N/A |
In terms of core metrics, the company reported a 1% increase in worldwide system sales, excluding foreign currency impacts, driven by 5% unit growth. Third-quarter GAAP operating profit also increased by 1%, while core operating profit showed a higher growth of 3%. Despite a slightly lower GAAP EPS of $1.35, compared to the consensus estimate of $1.41, the EPS excluding special items was $1.37, mitigated by a $0.14 negative impact due to higher taxes and reduced investment income.
Segment Performance
| Segment | Revenue Growth | Same-Store Sales Growth | Guidance Comparison |
|---|---|---|---|
| KFC Worldwide | 1% | N/A | N/A |
| Taco Bell U.S. | 5% | +4% | Outperformed |
| Pizza Hut Worldwide | (1%) | N/A | N/A |
Taco Bell U.S. showcased a strong performance, with same-store sales growth of 4%, significantly outperforming its Quick Service Restaurant competitors, indicating strong consumer loyalty and strategic marketing efforts. KFC International unit growth was notable at 9%, with continued aggressive expansion across multiple countries. However, Pizza Hut witnessed a 1% decline in worldwide system sales.
Operational Highlights
- Worldwide system sales grew 1%, excluding foreign currency translation.
- Unit count increased by 5%, with 1,029 gross new units added.
- Digital sales exceeded $8 billion, with the digital mix surpassing 50%.
- Foreign currency translations negatively impacted divisional operating profit by $3 million.
Executive Comments
David Gibbs, CEO of Yum! Brands, credited the quarter's success to the company's dual growth engines. Taco Bell's performance and the substantial unit growth at KFC International were emphasized, with the latter opening nearly 150 more units year-over-year across 64 countries. Despite certain sales pressures due to geopolitical and consumer sentiment issues, the company remains optimistic about ongoing growth prospects backed by its iconic brands, leadership, and advanced technology standards.
Dividends and Share Repurchase Programs
The company did not announce any new dividend or share repurchase programs in this report.
Forward Guidance
No forward guidance was provided for subsequent quarters.
Stock Movement
Following the earnings release, Yum! Brands' stock saw a minor increase of 0.32%.
Conclusion
Yum! Brands, Inc. continues on a path of strategic global expansion and digital integration. The company demonstrates resilience in facing external challenges while achieving targeted growth and notable performance across key segments, particularly with Taco Bell in the U.S. and KFC internationally. Although facing certain market pressures, the operational and strategic measures indicate a robust outlook moving forward.
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