Yum Brands reported first-quarter earnings on Wednesday, surpassing Wall Street forecasts for both profit and revenue, largely driven by another strong performance from its Taco Bell brand. According to a survey of analysts by London Stock Exchange Group, the company's adjusted earnings per share were $1.50, exceeding expectations of $1.38, while revenue reached $2.06 billion, above the anticipated $2.04 billion.
Yum posted a first-quarter net profit of $432 million, or $1.55 per share, up from $253 million, or $0.90 per share, in the same period last year. Excluding expenses related to the strategic review of Pizza Hut and other items, earnings per share stood at $1.50. Net sales increased by 15% to $2.06 billion, supported by higher revenue from company-owned restaurants. Last year, Yum acquired over 100 Taco Bell locations in the southeastern United States to accelerate growth and improve profitability.
Taco Bell: Outperforming the Industry
Global same-store sales for Yum rose 3%, led by standout brand Taco Bell. Same-store sales at Taco Bell increased by 8%, surpassing the 5.6% growth analysts had projected in a StreetAccount survey. Yum CEO Chris Turner stated, "Taco Bell delivered an outstanding 8% same-store sales growth, significantly outpacing the quick-service industry, building on strong growth in the first quarter of 2025."
KFC and Pizza Hut: Strong Internationally, Pressured Domestically
KFC reported a 2% increase in same-store sales, slightly below the 2.5% growth forecast by StreetAccount. Although the fried chicken chain's international operations are considered one of Yum's "growth engines," its U.S. business has struggled in recent years due to heightened competition and consumer demand for value. In the first quarter, KFC's U.S. system sales declined by 2%. To win back customers, KFC is adopting strategies from Taco Bell's success, focusing on innovation and affordability.
Similarly, Pizza Hut performed more strongly outside the United States. The challenged pizza chain reported flat global same-store sales, but its international same-store sales grew 2% during the quarter, while U.S. same-store sales contracted by 4%. Analysts had expected a 0.7% decline in Pizza Hut's global same-store sales, according to StreetAccount.
In November, Yum announced it would explore strategic options for the chain. Reuters reported earlier this month that several private equity firms, including Apollo Global Management and Sycamore Partners, were potential bidders for Pizza Hut. Although Yum did not provide an update on the strategic review in Wednesday's report, its earnings release highlighted key metrics excluding Pizza Hut, such as system sales, store counts, and core operating profit.
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