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YUM! Brands' (YUM) Q2 Earnings Beat, Revenues Miss Estimates
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YUM! Brands, Inc. (YUM - Free Report) reported mixed second-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. The top and bottom lines increased on a year-over-year basis. During second quarter, the company benefited from robust same-store sales and unit growth.
Following the results, the stock declined 1% in the pre-market trading session on Aug 2.
Earnings and Revenue Discussion
In second-quarter 2023, the company's adjusted earnings per share (EPS) came in at $1.41, surpassing the Zacks Consensus Estimate of $1.23. The metric jumped 33% from the prior year quarter.
Quarterly revenues of $1,687 million missed the consensus estimate of $1,749 million. However, the top line climbed 3% year over year. The upside can be attributed to an increase in revenues across its operating divisions.
Worldwide system sales — excluding foreign currency translation — rose 13% year over year, with Taco Bell, KFC and Pizza Hut rising 7%, 19% and 7% year over year, respectively.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
For second-quarter 2023, revenues from KFC totaled $682 million, up 1% from the prior-year quarter. Our model predicted the metric to decline 0.2% year over year. Comps in the division climbed 13% year over year against a decline of 1% reported in the previous quarter.
The segment's operating margin expanded 450 basis points (bps) year over year to 47.7%. In the quarter under review, the KFC Division opened 600 gross new restaurants in 60 countries.
At Pizza Hut, revenues amounted to $242 million, up 3% year over year. Our model suggested the metric to rise 2.7% year over year. Comps in the quarter increased 4% year over year against a decline of 3% in the prior-year quarter.
The segment's operating margin declined 190 bps year over year to 37.3%. The Pizza Hut division opened 357 gross new restaurants in 42 countries in the quarter under review.
Taco Bell's revenues were $621 million, up 6% from the year-ago quarter's levels. We expected the metric to gain 10.2% year over year. Comps in the segment rose 4% year over year compared with 8% growth reported in the year-ago quarter. Segmental operating margin expanded 10 bps year over year to 36.8%.
Taco Bell opened 63 gross new restaurants in 9 countries in the quarter under review.
In the second quarter, the Habit Burger Grill division’s revenues amounted to $142 million compared with $138 million reported in the previous quarter. Our model estimated the metric to climb 25% year over year. Comps in the division were flat year over year. This division opened 5 gross new restaurants in the United States.
Other Financial Details
As of Jun 30, 2023, cash and cash equivalents totaled $437 million compared with $367 million at 2022-end. Long-term debt, as of Jun 30, 2023, was $11,194 million compared with $11,453 million as of the end of 2022.
Zacks Rank & Other Key Picks
YUM currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Zacks Retail – Restaurants industry include:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1 (Strong Buy). PLAY has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of PLAY have gained 14% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PLAY’s 2024 sales and EPS indicates rises of 17% and 29%, respectively, from the year-ago period’s levels.
Domino's Pizza, Inc. (DPZ - Free Report) flaunts a Zacks Rank #1. DPZ has a long-term earnings growth rate of 13%. The stock has improved 2.2% in the past year.
The Zacks Consensus Estimate for DPZ’s 2024 sales and EPS suggests growth of 6.2% and 14.4%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have skyrocketed 72.7% in the past year.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS implies gains of 10% and 27.7%, respectively, from the year-ago period’s levels.
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YUM! Brands' (YUM) Q2 Earnings Beat, Revenues Miss Estimates
YUM! Brands, Inc. (YUM - Free Report) reported mixed second-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. The top and bottom lines increased on a year-over-year basis. During second quarter, the company benefited from robust same-store sales and unit growth.
Following the results, the stock declined 1% in the pre-market trading session on Aug 2.
Earnings and Revenue Discussion
In second-quarter 2023, the company's adjusted earnings per share (EPS) came in at $1.41, surpassing the Zacks Consensus Estimate of $1.23. The metric jumped 33% from the prior year quarter.
Quarterly revenues of $1,687 million missed the consensus estimate of $1,749 million. However, the top line climbed 3% year over year. The upside can be attributed to an increase in revenues across its operating divisions.
Worldwide system sales — excluding foreign currency translation — rose 13% year over year, with Taco Bell, KFC and Pizza Hut rising 7%, 19% and 7% year over year, respectively.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
Yum! Brands, Inc. price-consensus-eps-surprise-chart | Yum! Brands, Inc. Quote
Divisional Performance
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
For second-quarter 2023, revenues from KFC totaled $682 million, up 1% from the prior-year quarter. Our model predicted the metric to decline 0.2% year over year. Comps in the division climbed 13% year over year against a decline of 1% reported in the previous quarter.
The segment's operating margin expanded 450 basis points (bps) year over year to 47.7%. In the quarter under review, the KFC Division opened 600 gross new restaurants in 60 countries.
At Pizza Hut, revenues amounted to $242 million, up 3% year over year. Our model suggested the metric to rise 2.7% year over year. Comps in the quarter increased 4% year over year against a decline of 3% in the prior-year quarter.
The segment's operating margin declined 190 bps year over year to 37.3%. The Pizza Hut division opened 357 gross new restaurants in 42 countries in the quarter under review.
Taco Bell's revenues were $621 million, up 6% from the year-ago quarter's levels. We expected the metric to gain 10.2% year over year. Comps in the segment rose 4% year over year compared with 8% growth reported in the year-ago quarter. Segmental operating margin expanded 10 bps year over year to 36.8%.
Taco Bell opened 63 gross new restaurants in 9 countries in the quarter under review.
In the second quarter, the Habit Burger Grill division’s revenues amounted to $142 million compared with $138 million reported in the previous quarter. Our model estimated the metric to climb 25% year over year. Comps in the division were flat year over year. This division opened 5 gross new restaurants in the United States.
Other Financial Details
As of Jun 30, 2023, cash and cash equivalents totaled $437 million compared with $367 million at 2022-end. Long-term debt, as of Jun 30, 2023, was $11,194 million compared with $11,453 million as of the end of 2022.
Zacks Rank & Other Key Picks
YUM currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Zacks Retail – Restaurants industry include:
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) sports a Zacks Rank #1 (Strong Buy). PLAY has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of PLAY have gained 14% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PLAY’s 2024 sales and EPS indicates rises of 17% and 29%, respectively, from the year-ago period’s levels.
Domino's Pizza, Inc. (DPZ - Free Report) flaunts a Zacks Rank #1. DPZ has a long-term earnings growth rate of 13%. The stock has improved 2.2% in the past year.
The Zacks Consensus Estimate for DPZ’s 2024 sales and EPS suggests growth of 6.2% and 14.4%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of CHUY have skyrocketed 72.7% in the past year.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS implies gains of 10% and 27.7%, respectively, from the year-ago period’s levels.