+6% GAAP Operating Profit Growth and +10%
Core Operating Profit Growth Taco Bell Same-Store Sales
Growth +5%; KFC Unit Growth +8%
Yum! Brands, Inc. (NYSE: YUM) today reported results for the
second-quarter ended June 30, 2024. Worldwide system sales,
excluding foreign currency translation, grew 3% including a 1%
same-store sales decline. Second-quarter GAAP operating profit grew
6% and second-quarter core operating profit grew 10%.
Second-quarter GAAP EPS was $1.28 and second-quarter EPS excluding
Special Items was $1.35. Our year-over-year EPS excluding Special
Items results reflect a $0.20 negative impact from a higher current
year tax rate and lower investment income. Foreign currency
translation also unfavorably impacted our EPS by $0.03.
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DAVID GIBBS COMMENTS
David Gibbs, CEO, said “I’m incredibly pleased with how well our
teams have managed through a challenging operating environment to
deliver a 10% increase in Core Operating Profit. Our twin growth
engines of Taco Bell U.S. and KFC International combined delivered
5% system sales growth led by 8% unit growth. Second-quarter
results most clearly showcased the power of the Taco Bell brand
thanks to unmatched, crave-worthy innovation and a successful menu
expansion to a new platform offering, Cantina Chicken. Based on our
first half results, we continue to expect to deliver at least 8%
Core Operating Profit growth this year. Meanwhile, as we progress
into the next phase of our technology and digital journey, we are
laying the groundwork for another promising year in 2025 as
evidenced by the expansion of drive-thru Voice AI technology at
Taco Bell.”
SECOND-QUARTER
HIGHLIGHTS
- Worldwide system sales grew 3%, excluding foreign currency
translation, with KFC at 2%, Taco Bell at 7% and Pizza Hut
flat.
- Unit count increased 5% including 894 gross new units in the
quarter.
- Robust digital sales of nearly $8 billion, with digital mix
over 50%.
- GAAP operating profit grew 6%, and core operating profit grew
10%.
- Foreign currency translation unfavorably impacted divisional
operating profit by $12 million.
Reported Results
% Change
System Sales
Ex F/X
Same-Store Sales
Units
GAAP Operating Profit
Core
Operating Profit1
KFC Division
+2
(3)
+8
+3
+6
Taco Bell Division
+7
+5
+3
+10
+10
Pizza Hut Division
Even
(3)
+3
+4
+6
Worldwide
+3
(1)
+5
+6
+10
Second-Quarter
Year-to-Date
2024
2023
% Change
2024
2023
% Change
GAAP EPS
$1.28
$1.46
(12)
$2.38
$2.51
(5)
Less Special Items EPS1
$(0.07)
$0.05
NM
$(0.12)
$0.05
NM
EPS Excluding Special Items
$1.35
$1.41
(4)
$2.50
$2.46
+1
1 See reconciliation of Non-GAAP
Measurements to GAAP Results within this release for further detail
of Core Operating Profit and Special Items.
All comparisons are versus the same period
a year ago.
System sales growth figures exclude
foreign currency translation ("F/X") and core operating profit
growth figures exclude F/X and Special Items. Special Items are not
allocated to any segment and therefore only impact worldwide GAAP
results. See reconciliation of Non-GAAP Measurements to GAAP
Results within this release for further details.
Digital system sales includes all
transactions at system restaurants where consumers utilize ordering
interaction that is primarily facilitated by automated
technology.
KFC DIVISION
Second-Quarter
Year-to-Date
%/ppts Change
%/ppts Change
2024
2023
Reported
Ex F/X
2024
2023
Reported
Ex F/X
Restaurants
30,689
28,500
+8
N/A
30,689
28,500
+8
N/A
System Sales ($MM)
8,226
8,298
(1)
+2
16,354
16,355
Even
+3
Same-Store Sales Growth (%)
(3)
+13
NM
NM
(3)
+11
NM
NM
Franchise and Property Revenues ($MM)
405
416
(3)
Even
802
828
(3)
(1)
Operating Profit ($MM)
334
326
+3
+6
647
631
+3
+6
Operating Margin (%)
46.6
47.7
(1.1)
(0.4)
48.0
46.0
+2.0
+2.7
Second-Quarter (%
Change)
Year-to-Date (%
Change)
International
U.S.
International
U.S.
System Sales Growth Ex F/X
+3
(7)
+5
(7)
Same-Store Sales Growth
(3)
(5)
(2)
(6)
- KFC Division opened 598 gross new restaurants across 57
countries.
- Foreign currency translation unfavorably impacted operating
profit by $10 million.
KFC Markets1
Percent of KFC System
Sales2
System Sales Growth Ex
F/X
Second-Quarter
(% Change)
Year-to-Date
(% Change)
China
27%
+5
+7
United States
15%
(7)
(7)
Europe
11%
+9
+8
Asia
10%
(10)
(8)
Australia
7%
+3
+4
Latin America
7%
+20
+21
United Kingdom
6%
(3)
(2)
Middle East / Turkey / North Africa
6%
(11)
(8)
Africa
5%
+10
+10
Thailand
2%
+8
+8
Canada
2%
+5
+4
India
2%
+9
+10
1Refer to
investors.yum.com/financial-information/financial-reports/ for a
list of the countries within each of the markets.
2Reflects Full Year 2023.
TACO BELL DIVISION
Second-Quarter
Year-to-Date
%/ppts Change
%/ppts Change
2024
2023
Reported
Ex F/X
2024
2023
Reported
Ex F/X
Restaurants
8,565
8,320
+3
N/A
8,565
8,320
+3
N/A
System Sales ($MM)
4,017
3,760
+7
+7
7,614
7,224
+5
+5
Same-Store Sales Growth (%)
+5
+4
NM
NM
+3
+6
NM
NM
Franchise and Property Revenues ($MM)
234
218
+7
+7
444
419
+6
+6
Operating Profit ($MM)
250
228
+10
+10
458
432
+6
+6
Operating Margin (%)
37.5
36.8
0.7
0.7
36.3
36.2
0.1
0.1
- Taco Bell Division opened 56 gross new restaurants across 11
countries.
- Taco Bell U.S. system sales grew 7% and Taco Bell International
system sales excluding foreign currency grew 4%.
- Taco Bell U.S. same-store sales grew 5% and Taco Bell
International same-store sales declined 1%.
- Company-owned restaurant margins were 25.6%, flat
year-over-year.
PIZZA HUT DIVISION
Second-Quarter
Year-to-Date
%/ppts Change
%/ppts Change
2024
2023
Reported
Ex F/X
2024
2023
Reported
Ex F/X
Restaurants
19,864
19,242
+3
N/A
19,864
19,242
+3
N/A
System Sales ($MM)
3,140
3,201
(2)
Even
6,307
6,537
(4)
(2)
Same-Store Sales Growth (%)
(3)
+4
NM
NM
(5)
+5
NM
NM
Franchise and Property Revenues ($MM)
148
149
Even
+1
296
304
(3)
(1)
Operating Profit ($MM)
94
91
+4
+6
187
195
(4)
(2)
Operating Margin (%)
39.3
37.3
2.0
2.5
39.2
39.3
(0.1)
0.3
Second-Quarter (%
Change)
Year-to-Date (%
Change)
International
U.S.
International
U.S.
System Sales Growth Ex F/X
Even
(1)
(1)
(3)
Same-Store Sales Growth
(4)
(1)
(6)
(3)
- Pizza Hut Division opened 236 gross new restaurants across 30
countries.
- Foreign currency translation unfavorably impacted operating
profit by $2 million.
Pizza Hut Markets1
Percent of Pizza Hut System
Sales2
System Sales Growth Ex
F/X
Second-Quarter
(% Change)
Year-to-Date
(% Change)
United States
41%
(1)
(3)
China
18%
+10
+4
Asia
13%
(5)
(5)
Europe
12%
(6)
(5)
Latin America
6%
+1
+2
Middle East / Africa
5%
(6)
(6)
Canada
3%
+7
+5
India
2%
+4
+1
1Refer to
investors.yum.com/financial-information/financial-reports/ for a
list of the countries within each of the markets.
2Reflects Full Year 2023.
HABIT BURGER GRILL
DIVISION
- The Habit Burger Grill Division opened 4 gross new restaurants
this quarter.
- The Habit Burger Grill Division system sales declined 1% with
same-store sales declining 6%.
OTHER ITEMS
- See reconciliation of Non-GAAP Measurements to GAAP results
within this release for further detail of Special Items by
financial statement line item including the impact of Special Items
on General and administrative expenses.
- In June 2024, the Company completed a strategic transaction to
transfer certain rights related to trademarks of the Jeno’s and
Telepizza brands in Colombia and Chile to restaurant operator Food
Delivery Brands, S.A. As a result of the transaction, approximately
120 Jeno’s and Telepizza branded restaurant units were removed from
Pizza Hut’s global unit count.
- Disclosures pertaining to outstanding debt in our Restricted
Group capital structure will be provided at the time of the filing
of the second-quarter Form 10-Q.
CONFERENCE CALL
Yum! Brands, Inc. will host a conference call to review the
company's financial performance and strategies at 8:15 a.m. Eastern
Time August 6, 2024. The number is 404/975-4839 for U.S. callers,
833/950-0062 for Canada callers, and 929/526-1599 for international
callers, conference ID 125949.
The call will be available for playback beginning at 10:00 a.m.
Eastern Time August 6, 2024 through August 15, 2024. To access the
playback, dial 866/813-9403 in the U.S., 226/828-7578 in Canada,
0204/525-0658 for U.K. (local), and +44/204-525-0658
internationally, conference ID 908951.
The webcast and the playback can be accessed by visiting Yum!
Brands' website, investors.yum.com/events-and-presentations and
selecting “Q2 2024 Yum! Brands, Inc. Earnings Call.”
ADDITIONAL INFORMATION
ONLINE
Quarter-end dates for each division, restaurant count details,
definitions of terms and Restricted Group financial information are
available at investors.yum.com. Reconciliation of non-GAAP
financial measures to the most directly comparable GAAP measures
are included in our Condensed Consolidated Summary of Results.
FORWARD-LOOKING
STATEMENTS
This announcement may contain “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. We intend all
forward-looking statements to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally can be identified by the fact
that they do not relate strictly to historical or current facts and
by the use of forward-looking words such as “expect,”
“expectation,” “believe,” “anticipate,” “may,” “could,” “intend,”
“belief,” “plan,” “estimate,” “target,” “predict,” “likely,”
“seek,” “project,” “model,” “ongoing,” “will,” “should,”
“forecast,” “outlook” or similar terminology. These statements are
based on and reflect our current expectations, estimates,
assumptions and/ or projections, our perception of historical
trends and current conditions, as well as other factors that we
believe are appropriate and reasonable under the circumstances.
Forward-looking statements are neither predictions nor guarantees
of future events, circumstances or performance and are inherently
subject to known and unknown risks, uncertainties and assumptions
that could cause our actual results to differ materially from those
indicated by those statements. There can be no assurance that our
expectations, estimates, assumptions and/or projections, including
with respect to the future earnings and performance or capital
structure of Yum! Brands, will prove to be correct or that any of
our expectations, estimates or projections will be achieved.
Numerous factors could cause our actual results and events to
differ materially from those expressed or implied by
forward-looking statements, including, without limitation: food
safety and food- or beverage-borne illness concerns; adverse
impacts of health epidemics, deterioration in public health
conditions or the occurrence of other catastrophic or unforeseen
events; the success of our concepts’ franchisees; the success of
our development strategy; anticipated benefits from past or
potential future acquisitions, investments, other strategic
transactions or initiatives, or our portfolio business model; our
significant exposure to the Chinese market; our global operations
and related exposure to geopolitical instability; foreign currency
risks and foreign exchange controls; our ability to protect the
integrity or availability of IT systems or the security of
confidential information and other cybersecurity risks; compliance
with data privacy and data protection legal requirements; our
ability to successfully implement technology initiatives, including
utilization of artificial intelligence; our increasing dependence
on digital commerce platforms; the impact of social media; our
ability to protect our trademarks or other intellectual property;
shortages or interruptions in the availability and the delivery of
food, equipment and other supplies; the loss of key personnel,
labor shortages and increased labor costs, including as a result of
state and local legislation related to wages and working
conditions; changes in food prices and other operating costs; our
corporate reputation, the value and perception of our brands and
changes in consumer preferences and wellness trends; evolving
expectations and requirements with respect to social and
environmental sustainability matters; adverse effects of severe
weather and climate change; pending or future litigation and legal
claims or proceedings; changes in, or noncompliance with, legal
requirements; tax matters, including changes in tax rates or laws,
impositions of new taxes, tax implications of our restructurings,
or disagreements with taxing authorities; changes in consumer
discretionary spending and macroeconomic conditions, including
inflationary pressures and elevated interest rates; competition
within the retail food industry; risks relating to our level of
indebtedness. In addition, other risks and uncertainties not
presently known to us or that we currently believe to be immaterial
could affect the accuracy of any such forward-looking statements.
All forward-looking statements should be evaluated with the
understanding of their inherent uncertainty.
The forward-looking statements included in this announcement are
only made as of the date of this announcement and we disclaim any
obligation to publicly update any forward-looking statement to
reflect subsequent events or circumstances. You should consult our
filings with the Securities and Exchange Commission (including the
information set forth under the captions “Risk Factors” and
“Forward-Looking Statements” in our most recently filed Annual
Report on Form 10-K and Quarterly Report on Form 10-Q) for
additional detail about factors that could affect our financial and
other results.
Yum! Brands, Inc., based in Louisville, Kentucky, and its
subsidiaries franchise or operate a system of over 59,000
restaurants in more than 155 countries and territories under the
company’s concepts – KFC, Taco Bell, Pizza Hut and the Habit Burger
Grill. The Company's KFC, Taco Bell and Pizza Hut brands are global
leaders of the chicken, Mexican-style food, and pizza categories,
respectively. The Habit Burger Grill is a fast casual restaurant
concept specializing in made-to-order chargrilled burgers,
sandwiches and more. In 2024, Yum! was named to the Dow Jones
Sustainability Index North America for the eighth consecutive year,
and the company was recognized among TIME Magazine’s list of Best
Companies for Future Leaders, Newsweek’s list of America’s Most
Responsible Companies and USA Today’s America’s Climate Leaders.
Yum! also received widespread recognition in 2023, including being
listed on the Bloomberg Gender-Equality Index; and Forbes’ list of
America’s Best Employers for Diversity. In addition, KFC, Taco Bell
and Pizza Hut brands were ranked in the top five of Entrepreneur’s
Top Global Franchises Ranking for 2023.
Category: Earnings
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Analysts are invited to contact: Matt Morris, Head of Investor
Relations at 888/298-6986 Members of the media are invited to
contact: Virginia Ferguson, Vice President, Public Relations, at
502/874-8200
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