Yum Brands disappoints as Middle East conflict weighs on sales growth


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KFC and Taco Bell restaurants along 118th Avenue in Edmonton, on January 21, 2024, in Edmonton, Alberta, Canada.
Artur Widak | Nurphoto | Getty Images

Yum Brands on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations as KFC, Taco Bell and Pizza Hut all reported weaker-than-expected sales.

Yum is the third global restaurant giant to report disappointing revenue for the last three months of 2023. Starbucks and McDonald’s both missed Wall Street’s expectations, citing the Israel-Hamas war among their headwinds.

Yum’s stock fell more than 1% in premarket trading.

Here’s what Yum Brands reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: $1.26 adjusted vs. $1.40 expected
  • Revenue: $2.04 billion vs. $2.11 billion expected

Yum reported fourth-quarter net income of $463 million, or $1.62 per share, up from $371 million, or $1.29 per share, a year earlier.

Excluding items, the restaurant giant earned $1.26  cents per share. The company said its quarterly tax rate fluctuated, dragging its earnings down by 23 cents per share.

Net sales rose 1% to $2.04 billion. The company’s global same-store sales increased 1% as well.

Pizza Hut reported same-store sales declines of 2%, missing expectations of 0.6% growth. The pizza chain’s U.S. same-store sales shrank 4%, while its international same-store sales were flat.

KFC’s same-store sales rose 2%, coming in below StreetAccount estimates of 4.7%.

Even Taco Bell, usually the gem of Yum’s portfolio, underperformed Wall Street’s expectations. The Mexican-inspired chain reported same-store sales growth of 3%, missing StreetAccount estimates of 3.8%. A year earlier, the chain reported same-store sales growth of 11%, fueled by the permanent return of its cult-favorite Mexican Pizza.

In 2024, Yum plans to pass several major milestones for its global footprint. Yum’s footprint will surpass 60,000 locations, CEO David Gibbs said in a statement, including a KFC footprint of more than 30,000 restaurants and a Pizza Hut tally of beyond 20,000.

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