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YUM! Brands (YUM) Q2 Earnings Top, Revenues Miss, Stock Down
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YUM! Brands, Inc. (YUM - Free Report) reported mixed second-quarter 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and total revenues missing the same. On the other hand, the bottom line declined while the top line grew on a year-over-year basis.
Following the results, shares of the company inched down 1% in the pre-market trading session on Aug 6.
The top-line performance reflects solid contributions from the company’s Taco Bell and KFC divisions. The Taco Bell division’s performance was encouraging during the quarter on the back of the desirable menu innovation and the introduction of a new platform offering, Cantina Chicken. Also, KFC international’s contributions added to the uptrend.
However, increased company restaurant expenses and franchise advertising and other services expenses marred the bottom line. Also, foreign currency translation unfavorably impacted the quarter’s performance.
Nonetheless, increased gross new unit counts, drive-thru Voice AI technology expansion at Taco Bell and other strategic initiatives are likely to boost the company’s performance in 2024 and beyond.
Earnings and Revenue Discussion
YUM reported adjusted earnings per share of $1.35, which topped the Zacks Consensus Estimate of $1.32 by 2.3%. However, the metric declined 4% year over year.
Quarterly revenues of $1.763 billion missed the consensus mark of $1.797 billion by 1.9% but grew 4% year over year.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
Worldwide system sales — excluding foreign currency translation — increased 3% year over year, with Taco Bell rising 7% and KFC rising 2%. The metric remained flat year over year for Pizza Hut.
Divisional Performance
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
KFC: The revenues at the KFC division totaled $717 million, up 5% year over year. Our model predicted the metric to increase 10.5% from a year ago. Comps decreased 3% year over year against a gain of 13% reported in the prior-year quarter.
The division’s operating margin contracted 110 basis points (bps) year over year to 46.6%. In the quarter under review, the KFC division opened 598 gross new restaurants across 57 countries.
Pizza Hut: This division’s revenues amounted to $239 million, down 2% year over year. Our model predicted the metric to decrease 2.2% from the prior-year level. Comps decreased 3% year over year against growth of 4% in the year-ago quarter.
The division’s operating margin expanded 200 bps year over year to 39.3%. Pizza Hut division opened 236 gross new restaurants across 30 countries.
Taco Bell: The quarterly revenues of this division were $666 million, up 7% year over year. Our model precited the metric to increase 1.4% from the year-earlier level. Comps increased 5% year over year compared with 4% in the prior-year quarter.
The division’s operating margin expanded 70 bps year over year to 37.5%. Taco Bell opened 56 gross new restaurants across 11 countries.
Habit Burger Grill: The division’s revenues amounted to $141 million, down 0.7% year over year. Our model predicted the metric to increase 20.2% year over year.
Comps declined 6% year over year. In the quarter under review, the division opened four gross new restaurants.
Other Financial Details
As of Jun 30, 2024, YUM! Brands’ cash and cash equivalents totaled $404 million compared with $512 million at 2023-end. Long-term debt, as of Jun 30, was $11.14 billion compared with $11.142 billion as of 2023-end.
The Wendy’s Company (WEN - Free Report) reported dismal second-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line rose while the bottom line declined. Solid same-restaurant sales and strength in U.S. breakfast sales and digital sales momentum aided the company’s performance.
The company continues to focus on industry-leading quality, innovation and value. It aims to maintain a customer-first approach while driving its restaurant economic model throughout the year and beyond.
Shake Shack Inc. (SHAK - Free Report) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The bottom and top lines increased on a year-over-year basis. During the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.
Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans to reduce build costs by 10% in 2024 and further lower costs in 2025, enabling the exploration of new real estate options while maintaining returns. It intends to achieve strong unit-level economics and boost ROI, fostering long-term shareholder value creation.
The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The bottom and top line increased from the prior-year quarter’s figure.
During the quarter, CAKE stated benefits from strong demand and sales performance of new restaurant openings. Also, improvements in food efficiencies, labor productivity, overtime and wage management enhanced restaurant-level profitability. The company emphasizes strengthening its operational service to drive long-term growth.
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YUM! Brands (YUM) Q2 Earnings Top, Revenues Miss, Stock Down
YUM! Brands, Inc. (YUM - Free Report) reported mixed second-quarter 2024 results, with adjusted earnings surpassing the Zacks Consensus Estimate and total revenues missing the same. On the other hand, the bottom line declined while the top line grew on a year-over-year basis.
Following the results, shares of the company inched down 1% in the pre-market trading session on Aug 6.
The top-line performance reflects solid contributions from the company’s Taco Bell and KFC divisions. The Taco Bell division’s performance was encouraging during the quarter on the back of the desirable menu innovation and the introduction of a new platform offering, Cantina Chicken. Also, KFC international’s contributions added to the uptrend.
However, increased company restaurant expenses and franchise advertising and other services expenses marred the bottom line. Also, foreign currency translation unfavorably impacted the quarter’s performance.
Nonetheless, increased gross new unit counts, drive-thru Voice AI technology expansion at Taco Bell and other strategic initiatives are likely to boost the company’s performance in 2024 and beyond.
Earnings and Revenue Discussion
YUM reported adjusted earnings per share of $1.35, which topped the Zacks Consensus Estimate of $1.32 by 2.3%. However, the metric declined 4% year over year.
Quarterly revenues of $1.763 billion missed the consensus mark of $1.797 billion by 1.9% but grew 4% year over year.
Yum! Brands, Inc. Price, Consensus and EPS Surprise
Yum! Brands, Inc. price-consensus-eps-surprise-chart | Yum! Brands, Inc. Quote
Worldwide system sales — excluding foreign currency translation — increased 3% year over year, with Taco Bell rising 7% and KFC rising 2%. The metric remained flat year over year for Pizza Hut.
Divisional Performance
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
KFC: The revenues at the KFC division totaled $717 million, up 5% year over year. Our model predicted the metric to increase 10.5% from a year ago. Comps decreased 3% year over year against a gain of 13% reported in the prior-year quarter.
The division’s operating margin contracted 110 basis points (bps) year over year to 46.6%. In the quarter under review, the KFC division opened 598 gross new restaurants across 57 countries.
Pizza Hut: This division’s revenues amounted to $239 million, down 2% year over year. Our model predicted the metric to decrease 2.2% from the prior-year level. Comps decreased 3% year over year against growth of 4% in the year-ago quarter.
The division’s operating margin expanded 200 bps year over year to 39.3%. Pizza Hut division opened 236 gross new restaurants across 30 countries.
Taco Bell: The quarterly revenues of this division were $666 million, up 7% year over year. Our model precited the metric to increase 1.4% from the year-earlier level. Comps increased 5% year over year compared with 4% in the prior-year quarter.
The division’s operating margin expanded 70 bps year over year to 37.5%. Taco Bell opened 56 gross new restaurants across 11 countries.
Habit Burger Grill: The division’s revenues amounted to $141 million, down 0.7% year over year. Our model predicted the metric to increase 20.2% year over year.
Comps declined 6% year over year. In the quarter under review, the division opened four gross new restaurants.
Other Financial Details
As of Jun 30, 2024, YUM! Brands’ cash and cash equivalents totaled $404 million compared with $512 million at 2023-end. Long-term debt, as of Jun 30, was $11.14 billion compared with $11.142 billion as of 2023-end.
Zacks Rank & Recent Retail-Wholesale Releases
YUM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Wendy’s Company (WEN - Free Report) reported dismal second-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line rose while the bottom line declined. Solid same-restaurant sales and strength in U.S. breakfast sales and digital sales momentum aided the company’s performance.
The company continues to focus on industry-leading quality, innovation and value. It aims to maintain a customer-first approach while driving its restaurant economic model throughout the year and beyond.
Shake Shack Inc. (SHAK - Free Report) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The bottom and top lines increased on a year-over-year basis. During the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.
Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans to reduce build costs by 10% in 2024 and further lower costs in 2025, enabling the exploration of new real estate options while maintaining returns. It intends to achieve strong unit-level economics and boost ROI, fostering long-term shareholder value creation.
The Cheesecake Factory Incorporated (CAKE - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The bottom and top line increased from the prior-year quarter’s figure.
During the quarter, CAKE stated benefits from strong demand and sales performance of new restaurant openings. Also, improvements in food efficiencies, labor productivity, overtime and wage management enhanced restaurant-level profitability. The company emphasizes strengthening its operational service to drive long-term growth.