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yum brand Quarterly profits and sales announced Tuesday fell short of Wall Street expectations as same-store sales at KFC and Pizza Hut fell more than expected.
“The complex consumer environment that exists in many markets around the world contributes to significant regional sales disparity, and as a result, our system sales growth this year has been slower than our long-term algorithm. CEO David Gibbs said at the company’s conference. phone.
In 2022, Yum has set long-term goals of increasing unit sales growth to 5%, system sales growth to 7%, and operating profit growth to 8%.
Here’s how the company reported compared to Wall Street expectations, based on a survey of analysts by LSEG.
Earnings per share: $1.37 adjusted vs. $1.41 expected Revenue: $1.83 billion vs. $1.9 billion expected
Yum reported third-quarter net income of $382 million, or $1.35 per share, down from $416 million, or $1.46 per share, in the same period last year.
Excluding items, the company earned $1.37 per share.
Net sales increased 7% to $1.83 billion.
Yum’s global same-store sales declined 2% in the quarter, driven by weaker results at KFC and Pizza Hut, which reported a 4% decline in same-store sales.
Gibbs said in a statement that the company’s sales have been hurt by pressures related to “geopolitical conflicts and deteriorating consumer sentiment.”
Conflicts in the Middle East have weighed on Yum’s performance since the fourth quarter of last year. In countries like the Middle East, Indonesia and Malaysia, for example, KFC’s same-store sales declined by 45% over the same period.
KFC’s U.S. same-store sales fell 5% in the quarter. KFC’s market is the second-largest after China, but the chain has ceded market share to Popeyes in recent years. Last year, Popeyes overtook KFC to become the second largest chicken chain in the United States.
Executives said Tuesday that KFC will focus on value in the fourth quarter.
Pizza Hut, on the other hand, saw a steeper decline in overseas markets. The pizza chain saw international same-store sales decline 6%, but U.S. same-store sales fell just 1%. Gibbs said Pizza Hut has moved to offer more discounts in China, India and some Middle Eastern countries.
Taco Bell, a gem in Yum’s portfolio, reported a 4% increase in same-store sales. Taco Bell’s sales increased in the quarter due to the launch of Cheesy Street Chalupas, the return of Big Cheez-It, and the rollout of $7 Value Meals.
Gibbs said Taco Bell led the industry in overall perceived value among fast food consumers in the third quarter, supporting sales amid an industry-wide downturn.
Correction: This article has been updated to correct a quote from Yum CEO David Gibbs.
