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YUM! Brands (YUM) Q3 Earnings Lag Estimates, Revenues Top
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YUM! Brands, Inc. (YUM - Free Report) reported mixed third-quarter 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line rose year over year, while the bottom line declined on a year-over-year basis.
During the third quarter, the company reported resilient global business backed by solid demand and unit development initiatives. Also, it reported growth in its digital business fueled by the solid adoption of its global platforms. During the quarter, the company reported digital sales of more than $6 billion.
Earnings and Revenue Discussion
In third-quarter 2022, the company's adjusted earnings per share (EPS) of $1.09 missed the Zacks Consensus Estimate of $1.14. In the prior-year quarter, the company reported adjusted EPS of $1.22.
Yum Brands, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $1,640 million beat the consensus mark of $1,638 million. Also, the top line increased 2.1% year over year. The upside can be attributed to an increase in franchise and property revenues.
Worldwide system sales — excluding foreign currency translation — increased 7% year over year, with Taco Bell (rising 9% year over year), KFC (8%) and Pizza Hut (4%).
Divisional Performance
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
For third-quarter 2022, revenues from KFC totaled $704 million, up 1.7% year over year. Comps in the division increased 7% year over year compared with 6% growth reported in the prior-year quarter.
The segment's operating margin declined 200 basis points (bps) year over year to 43.4%. In the quarter under review, KFC Division opened 485 gross new restaurants.
At Pizza Hut, revenues amounted to $237 million, down 4% year over year. Comps in the quarter increased 1% year over year compared with 4% growth reported in the prior-year quarter.
The segment's operating margin contracted 160 bps year over year to 39%. Pizza Hut Division opened 392 gross new restaurants in the first quarter.
Taco Bell's revenues were $568 million, up 6.4% from the year-ago quarter's levels. Comps in the segment increased 6% year over year compared with a 5% growth reported in the year-ago quarter. Its operating margin increased 130 bps year over year to 35.9%.
Taco Bell opened 98 gross new restaurants in the quarter under review.
The Habit company sales amounted to $131 million during the third quarter. Comps in the division declined 1% year over year. In the quarter under review, the company opened four gross new restaurants in the United States.
Other Financial Details
As of Sep 30, 2022, cash and cash equivalents totaled $410 million compared with $412 million on Jun 30, 2022. Long-term debt, as of Sep 30, 2022, stood at $11,517 million compared with $11,540 million as of Jun 30, 2022.
Potbelly sports a Zacks Rank #1. PBPB has a trailing four-quarter earnings surprise of 22.2%, on average. Shares of PBPB have declined 16.6% in the past year.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 17.9% and 101.9%, respectively, from the corresponding year-ago period’s levels.
Wingstop sports a Zacks Rank #1. WING has a long-term earnings growth rate of 11%. Shares of WING have declined 8% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 17.1%, respectively, from the comparable year-ago period’s levels.
Chipotle currently carries a Zacks Rank #2 (Buy). CMG has a trailing four-quarter earnings surprise of 4.1%, on average. The stock has declined 17.9% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.2% and 30.7%, respectively, from the corresponding year-ago period’s levels.
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YUM! Brands (YUM) Q3 Earnings Lag Estimates, Revenues Top
YUM! Brands, Inc. (YUM - Free Report) reported mixed third-quarter 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line rose year over year, while the bottom line declined on a year-over-year basis.
During the third quarter, the company reported resilient global business backed by solid demand and unit development initiatives. Also, it reported growth in its digital business fueled by the solid adoption of its global platforms. During the quarter, the company reported digital sales of more than $6 billion.
Earnings and Revenue Discussion
In third-quarter 2022, the company's adjusted earnings per share (EPS) of $1.09 missed the Zacks Consensus Estimate of $1.14. In the prior-year quarter, the company reported adjusted EPS of $1.22.
Yum Brands, Inc. Price, Consensus and EPS Surprise
Yum Brands, Inc. price-consensus-eps-surprise-chart | Yum Brands, Inc. Quote
Quarterly revenues of $1,640 million beat the consensus mark of $1,638 million. Also, the top line increased 2.1% year over year. The upside can be attributed to an increase in franchise and property revenues.
Worldwide system sales — excluding foreign currency translation — increased 7% year over year, with Taco Bell (rising 9% year over year), KFC (8%) and Pizza Hut (4%).
Divisional Performance
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
For third-quarter 2022, revenues from KFC totaled $704 million, up 1.7% year over year. Comps in the division increased 7% year over year compared with 6% growth reported in the prior-year quarter.
The segment's operating margin declined 200 basis points (bps) year over year to 43.4%. In the quarter under review, KFC Division opened 485 gross new restaurants.
At Pizza Hut, revenues amounted to $237 million, down 4% year over year. Comps in the quarter increased 1% year over year compared with 4% growth reported in the prior-year quarter.
The segment's operating margin contracted 160 bps year over year to 39%. Pizza Hut Division opened 392 gross new restaurants in the first quarter.
Taco Bell's revenues were $568 million, up 6.4% from the year-ago quarter's levels. Comps in the segment increased 6% year over year compared with a 5% growth reported in the year-ago quarter. Its operating margin increased 130 bps year over year to 35.9%.
Taco Bell opened 98 gross new restaurants in the quarter under review.
The Habit company sales amounted to $131 million during the third quarter. Comps in the division declined 1% year over year. In the quarter under review, the company opened four gross new restaurants in the United States.
Other Financial Details
As of Sep 30, 2022, cash and cash equivalents totaled $410 million compared with $412 million on Jun 30, 2022. Long-term debt, as of Sep 30, 2022, stood at $11,517 million compared with $11,540 million as of Jun 30, 2022.
Zacks Rank & Key Picks
Yum! Brands carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Potbelly Corporation (PBPB - Free Report) , Wingstop Inc. (WING - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) .
Potbelly sports a Zacks Rank #1. PBPB has a trailing four-quarter earnings surprise of 22.2%, on average. Shares of PBPB have declined 16.6% in the past year.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 17.9% and 101.9%, respectively, from the corresponding year-ago period’s levels.
Wingstop sports a Zacks Rank #1. WING has a long-term earnings growth rate of 11%. Shares of WING have declined 8% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 17.1%, respectively, from the comparable year-ago period’s levels.
Chipotle currently carries a Zacks Rank #2 (Buy). CMG has a trailing four-quarter earnings surprise of 4.1%, on average. The stock has declined 17.9% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.2% and 30.7%, respectively, from the corresponding year-ago period’s levels.