News

KFC, Pizza Hut, Taco Bell parent turns in solid Q3 sales

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October 30, 2019

Yum Brands, Inc. Q3 sales show the multi-brand QSR operator finished out September with solid performance across the board, including 8% global system sales growth (excluding foreign currency translation), while same-store sales system-wide picked up 3% over the previous year's Q3 numbers, a news release said. 

KFC led the pack in system sales at 8% growth, while Pizza Hut and Taco Bell followed with 7% growth at each brand, although that number for Pizza Hut drops to 2% when adjusting to include performance of the non-U.S. pizza delivery company, Telepizza. Additionally, foreign currency translation unfavorably impacted divisional operating profit by $7 million.

Net new unit growth for the company was 7%, but Yum Brands recorded a $60 million pre-tax investment expense related to its investment in Grubhub, resulting in a negative impact of 15 cents in earnings per share. In fact, the company said that when paired with $94 million of pre-tax investment income recorded in Q3 2018 resulting in a 22-cent benefit to earnings per share, its Grubhub investment unfavorably impacted year-over-year EPS growth by 37 cents. 

Other highlights include: 

• 389 net units for Q3 or 7% growth on year-over-year basis. 
• 411 gross new KFC stores opened in 52 countries.
• 6.1% KFC operating margin increase.
• 205 gross new Pizza Hut division stores in 43 countries.
• 2.7 Pizza Hut operating margin decrease.
• 67 gross new Taco Bell division stores opened in 13 countries.
• 1.4% Taco Bell operating margin increase.

"We're rapidly approaching the end of a truly historic year," Yum Brands CEO Greg Creed said in the financial report. "2019 will not only mark the completion of our three-year transformation of Yum, but it will also mark the end of my tenure as Yum CEO. 

"I couldn't be prouder of the progress that our teams around the world have made to become more focused, more franchised and more efficient; all while accelerating global growth. Today Yum has a unique and powerful business model backed by a culture that is stronger than ever and by talent that is truly world class. I'm confident that as I retire, David Gibbs is the right leader to leverage our scale and key growth drivers to enhance franchisee economics, champion the customer experience and drive global growth to maximize value for our stakeholders."