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YUM! Brands' (YUM) to Report Q4 Earnings: What's in Store?

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YUM! Brands, Inc. (YUM - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 4, before the opening bell. In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 27.9%.

Q4 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share is pegged at 99 cents, indicating a decline of 1% from the prior-year quarter. The consensus mark for revenues stands at $1.73 billion, suggesting growth of 2.17% from $1.69 billion reported in the prior-year quarter.

Factors to Note

Yum! Brands’ fourth-quarter top line might reflect the impact of strong digitalization, delivery services and expansion efforts. At the end of third-quarter 2020, the company had more than 35,000 restaurants offering delivery globally, up 11% year over year. Moreover, the company’s off-premise sales, which generated same-store sales growth of 10% in third-quarter 2020 is likely to have sustained the momentum in the fourth quarter.

Yum! Brands’ partnership with online food delivery platform Grubhub may have boosted online sales and delivery from its restaurants. Additionally, the company implemented various digital features in mobile and online platforms across all brand segments to enhance guest experience. During the first, second and third quarter of 2020, the company opened 515, 328 and 556 gross new restaurants, respectively. Store expansion efforts might have contributed to the to-be-reported quarter’s performance.

The Zacks Consensus Estimate for revenues at Pizza Hut and Taco Bell segments is pegged at $279 million and $638 million, suggesting a year-over-year decline of 6% and 4.1%, respectively. Moreover, the consensus mark for revenues at KFC stands at $685 million, indicating a decline of 6.4% from the year-ago quarter.

Yum Brands, Inc. Price and EPS Surprise Yum Brands, Inc. Price and EPS Surprise

Yum Brands, Inc. price-eps-surprise | Yum Brands, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Yum! Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Yum! Brands has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of +1.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Retail-Wholesale space that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Wingstop Inc. (WING - Free Report) currently has a Zacks Rank #3 and an Earnings ESP of +20.00%.

Darden Restaurants, Inc. (DRI - Free Report) carries a Zacks Rank #3 and has an Earnings ESP of +35.49%.

Papa John's International, Inc. (PZZA - Free Report) has a Zacks Rank #3 and an Earnings ESP of +1.48%.

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