Yum Brands beat fourth-quarter comparable sales estimates on Wednesday, driven by strong demand for affordable meal options at Taco Bell stores in the US, as well as strength in its KFC international business.
Fast‑food chains such as Yum Brands and McDonald’s are leaning on value-focused meals to attract budget‑conscious diners who are cutting back on eating out. The company has raised prices of some items over the last few years amid sticky inflation.
Yum Brands' worldwide same-store sales rose 3% for the quarter ended December 31, compared with analysts' average estimate of a 2.74% increase, according to data compiled by LSEG.
Taco Bell US accounts for about 36% of Yum Brands' operating profits. Demand for its Tex-Mex cuisine-inspired tacos and wraps, as well as its combo meals ranging between $5 to $11.99, helped drive up same-store sales at US outlets by 7% in the quarter, beating estimates of a 6.5% growth.
KFC's worldwide same-store sales grew 3% in the quarter, beating expectations, as Yum expands the chicken fast food chain's international footprint with new store openings across key growing markets.
Meat-packers company Tyson Foods this week said demand for chicken is rising as people are turning to cheaper protein options due to soaring beef prices.
Yum Brands has also been exploring strategic options for its Pizza Hut chain, whose sales have now fallen for nine straight quarters, underscoring its struggles in a highly competitive fast-food industry. Pizza Hut's sales were down 5% for the full year in the US.
On an adjusted basis, profit for the quarter was $1.73 per share, compared with estimates of $1.77 per share.
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