Yum Manufacturers (YUM) Q3 2021 Revenue Exceeds Estimates
Within the lane of a Yum! Manufacturers Inc. Kentucky Fried Rooster (KFC) and Taco Bell Restaurant in Lockport, Illinois, USA
Daniel Acker | Bloomberg | Getty Photographs
Yum Manufacturers reported quarterly earnings and earnings on Thursday that exceeded analyst expectations, fueled by robust demand for KFC’s fried hen.
Nonetheless, with late-night and breakfast gross sales nonetheless beneath stress from the pandemic, Taco Bell’s efficiency was weaker than anticipated and resulted in a decline in Yum’s gross sales progress in the identical retailer.
The corporate’s shares fell 1.5% in morning commerce.
This is what the corporate mentioned, relative to Wall Road expectations, primarily based on an analyst survey by Refinitiv:
- Earnings per share: adjusted $ 1.22 versus anticipated $ 1.08
- Income: $ 1.61 billion versus an anticipated $ 1.59 billion
The corporate reported web earnings of $ 528 million, or $ 1.75 per share, for the third quarter, in comparison with $ 283 million, or 92 cents per share, a 12 months earlier.
With out gadgets, Yum earned $ 1.22 per share, beating the $ 1.08 per share anticipated by analysts surveyed by Refinitiv.
Like different restaurant firms, Yum is dealing with larger inflation, notably in the US. However executives shrugged off worries about prices which are hurting margins by main measurement within the US and including that worldwide markets account for 60% of gross sales.
Web gross sales rose 11% to $ 1.61 billion, beating expectations of $ 1.59 billion. Throughout all chains, gross sales in the identical retailer elevated by 5%. Wall Road was anticipating gross sales progress of 5.8% in the identical retailer, in keeping with StreetAccount estimates.
The worldwide unfold of the Covid Delta variant weakened the demand for Yums pizza, hen and tacos in some essential Asian markets. Some clients could have caught to ordering their takeaway or choosing supply. Yum mentioned it’s seeing sustained momentum in digital gross sales, which represented about 40% of orders this quarter. System-wide digital income exceeded $ 5 billion within the quarter.
KFC’s gross sales in the identical retailer rose 6% after falling 4% a 12 months in the past. Whereas progress in China, its largest market, was subdued within the quarter, gross sales within the dwelling market rose 4%. On a 2-year foundation, US gross sales in the identical retailer elevated 13%. In July, year-to-date digital gross sales outpaced 2020 as a complete.
Pizza Hut noticed gross sales develop 4% in the identical retailer as worldwide markets rebounded. In the US, gross sales in the identical retailer rose solely 2% as the corporate confronted powerful year-on-year comparisons and human useful resource challenges. On a two-year foundation, Pizza Hut US gross sales in the identical retailer had been up 8%. Home off-premise gross sales rose 17% for the quarter, pushed by accelerated progress within the carry-out enterprise.
Taco Bell gross sales in the identical retailer elevated 5% for the quarter and eight% on a two-year foundation. The chain struggled to regain late-night and breakfast gross sales in the course of the pandemic, but it surely put its breakfast again available on the market in August. The Mexican-inspired chain’s same-store gross sales had the largest failure in Yum’s portfolio. StreetAccount estimates that the chain would report 6.2% gross sales progress in the identical retailer.
“It has its personal distinctive challenges because it is a little more targeted on particular person meals than household gatherings,” David Gibbs, CEO of Yum, informed analysts. “You’ll be able to see that manufacturers like Pizza Hut and KFC, which give attention to household gatherings, do even higher, however Taco Bell’s efficiency is powerful.”
Yum added 760 new areas in the course of the quarter, setting a report for the corporate.