Yum Brands (YUM) Q1 2022 earnings

Yum Brands on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations as lockdowns in China weighed on sales.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.05 adjusted vs. $1.07 expected
• Revenue: $1.55 billion vs. $1.59 billion expected

Global same-store sales rose 3% in the quarter.

Yum’s KFC chain reported same-store sales growth of 3% during the period, but the company said, excluding China, same-store sales for the fried chicken chain actually climbed 10%. China is KFC’s largest market by system-wide sales. Wall Street was anticipating same-store sales growth of 4.4%, according to StreetAccount estimates.

Likewise, China also weighed on Pizza Hut’s results. The market is the pizza chain’s second-largest. Pizza Hut reported flat global same-store sales growth for the quarter. International markets, including China, saw same-store sales rise 5%.

Pizza Hut’s U.S. sales were also under pressure. The chain said same-store sales declined 6% in its home market.

Taco Bell was the only chain in Yum’s portfolio to report better-than-expected same-store sales growth, at 5% versus an expected 2.7%.

Yum opened 628 net new locations during the quarter, most of which were KFC restaurants. Digital orders accounted for more than 40% of transactions and $6 billion in system-wide sales during the quarter.

Net sales rose 4% to $1.55 billion, falling short of expectations of $1.59 billion.

The company reported first-quarter net income of $399 million, or $1.36 per share, up from $326 million, or $1.07 per share, a year earlier.

Excluding refranchising gains, profits from Russian operations and other items, the company earned $1.05 cents per share, missing the $1.07 per share expected by analysts surveyed by Refinitiv.

Yum pledged to donate net profits from its Russian operations to humanitarian efforts after the Kremlin invaded Ukraine. It also temporarily closed company-owned KFC locations in Russia and is finalizing an agreement with its Russian franchisee to suspend Pizza Hut operations in the country. Russia accounted for about 2% of Yum’s system-wide sales in 2021, and it was a key market for new restaurant development.

Read the full earnings report here.

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