Yum Brands (NYSE:YUM) on Wednesday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by strong same-store sales growth at Taco Bell.
Overall, the restaurant giant saw strong U.S. demand for its food, but weak sales in China once again weighed on KFC’s and Pizza Hut’s results. After the Chinese government relaxed its zero Covid policy, a wave of new outbreaks has hit the country, hurting recovery for Yum and other restaurant companies, like Starbucks (NASDAQ:SBUX).
Earnings per share came in at $1.31 adjusted vs. the expected $1.26. Revenue proved to be $2.02 billion vs. $1.92 billion expected
Yum reported fourth-quarter net income of $371 million, or $1.29 per share, up from $330 million, or $1.11 per share, a year earlier.
Excluding expenses tied to its decision to exit Russia and other items, the company earned $1.31 cents per share.
Net sales rose 7% to $2.02 billion. The company’s global same-store sales increased 6% in the quarter, driven by diners’ strong appetite for Taco Bell.
Taco Bell, which is typically the strongest performer in Yum’s portfolio, reported same-store sales growth of 11%, beating StreetAccount estimates of 6.7%. Most of the Mexican-inspired chain’s locations are in the U.S., although it’s been expanding internationally in recent years.
KFC fell short of Wall Street’s expectations as weak performance in China weighed on its results. The fried chicken chain reported same-store sales growth of 5%, just shy of estimates of 5.4%. Excluding China, its largest market, KFC’s same-store sales increased 9%.
YUM shares fell 49 cents to begin Wednesday at $128.85.
