Taco Bell, KFC parent company Yum! Brands Q1 earnings beat same-store sales estimates

Yum! Brands (YUM), which operates KFC, Pizza Hut, Taco Bell, and Habit Burger Grill, posted fiscal Q1 earnings results Wednesday before market open.

As consumers sought out value, the fast good giant delivered. In Q1, Yum! Brands value offerings and promotions won over consumers as same-store sales beat estimates. That was led by KFC, followed by Taco Bell, up 8%, and Pizza Hut, which posted same-store sales growth of 7%, far higher than estimates of just 3.27%.

CEO David Gibbs said the results showed “demand for our iconic brands is evident as our incredible teams and franchise partners delivered another strong quarter with system sales.”

Here’s what YUM! Brands reported, compared to Bloomberg estimates:

• Revenue: $1.65 billion versus $1.63 billion expected

• Adjusted earnings per share: $1.06 versus $1.13 per share expected

• Same-store sales: up 8% versus up 5.76% expected

  • KFC: up 9% versus 6.74% expected

  • Pizza Hut: up 7% versus up 3.27% expected

  • Taco Bell: up 8% versus up 6.39%

  • Habit Burger Grill unit: flat year over year versus up 2.66% expected

Year-to-date shares of Yum! Brands are up nearly 11%, outpacing the S&P 500 (^GSPC), up 7.2%. Wall Street remains somewhat optimistic on the fast-food conglomerate. As of Tuesday, there are 14 buys, 16 holds and 0 sells.

This quarter, YUM! Brands saw record digital sales of nearly $7 billion, accounting for more than 45% of sales.

However, the company posted quarterly earnings that missed estimates, $1.06 per share, despite a rebound in China.

KFC saw sales growth up 8% led by a rebound in China, which made up 25% of total sales, followed by sales in the U.S, which account for 15% as Americans sought out value like KFC’s 2-for-$5 Chicken Wraps.

Pizza Hut’s U.S. presence led growth, accounting for 41% of total sales, followed by China at 14%. Earlier this year the company introduced Melts as a digital-first offering with younger consumers in mind, a growth strategy that the company hopes will help it stay relevant. (See the 2022 YUM! Brands’ Investor Day for more.)

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Taco Bell also saw strong same-store sales growth, up 8% last quarter, higher than this time period last year. In the U.S. alone, Taco Bell same-store sales grew 9%. International sales dragged down the metric, but still remained higher, up 4% year over year.

Habit Burger Grill, which Yum! Brands acquired back in 2020, saw flat same-store sales growth last quarter, but it opened 11 new restaurants in the U.S. and. Cambodia.

In mid-April, the company completed its exit from the Russian market by selling its KFC business in Russia to a local operator. In the release, the company noted that the impact from this sale will not impact the company beyond the first quarter.

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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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