Operations

Yum! Brands posts strong Q2 as Taco Bell leads growth

Photo: Yum! Brands

July 30, 2026 by Valerie Gritton

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If the song "Break My Stride" was tied to restaurant company, perhaps Yum Brands fits the bill. Coming off a Cyclospora outbreak linked to its Taco Bell chain, the company has shown no signs of slowing as Q2 earnings highlighted a system-wide, year-over-year sales increase of 5 percent for the chain, the company announced in a news release.

In total, the parent company of KFC, Taco Bell, Pizza Hut and The Habit Burger Grill opened 1,053 new restaurants during the year. For the Q2 period, revenue increased to $2.169 billion, up 12% from $1.933 billion in Q2 2025.

At the start of Yum's Q2 earnings call, CEO Chris Turner addressed the food safety issues Taco Bell has faced and how the chain has continued to overcome the challenge.

"Before discussing our second quarter performance, I want to address the current public health issue that our industry is navigating in the U.S. First and foremost, the safety of our consumers is our highest priority. We know our consumers place their trust in us. We remain committed to earning that trust each and every day," Turner said. "It starts with an unwavering commitment to food quality and safety. That commitment is reflected in how we act when issues arise. Our teams are acting quickly and transparently while keeping the safety and well-being of our consumers as the top priority. That is how we build the world's most loved, trusted and connected restaurant brands."

The company's Q2 earnings beat Wall Street expectations, driven by Taco Bell's 9% increase in system-wide sales for the quarter and same-store sales increase of 7%. The chain opened 54 new restaurants across 15 countries as U.S. system-wide sales increased 9%. For the Q2 period, revenue increased 20 percent to $853 million, up from $711 million in Q2 2025.

Turner said the chain has done a great job responding to the issue and is rebounding after several weeks' of traffic declines as the FDA continues it's Cyclospora investigation.

"With respect to the consumer sentiment, though, we've seen real improvement as consumers have understood better the nature of the issue, and they understand that it is not a Taco Bell specific issue. If you think about signs of that engagement, our letter, the Taco Bell team's letter to their fans on Instagram and TikTok, it was the highest engaged post of this year and one of the highest of all time. Our measures of online sentiment, as we said, have returned to pre-issue levels of positivity. There's been no change in our measures to brand love. In fact, in some of those measures, there's even an increase in positivity and brand love," Turner said.

"You've seen a significant decline in Taco Bell's share of the conversation related to this issue. The best proof point is that consumers are coming back to the restaurants on a steady basis. We've seen steady improvement in those sales trends. If you think about what we're doing, we're driving the magic formula. We shared a little detail on last week's Tuesday drop, this week's Tuesday drop. The Mexican Pizza drop this Tuesday (June 28), it generated the most app traffic, the most app transactions, and the most loyalty acquisitions of any Tuesday drop ever. In fact, we saw positive transaction growth on Tuesday. If you look to the remainder of Q3, you look into Q4, our team is focused on bringing fans back, and we're seeing those fans respond well. Taco Bell is known for value, and our consumers care about it. There is no brand and no team better equipped to drive a recovery in this temporary sales impact than Taco Bell."

KFC and Habit Burger Grill

Meanwhile, YUM!'s KFC division opened 660 new restaurant locations across 55 countries. System-wide sales for the brand grew 6% while same-store sales rose 2% for the chain. Revenue for the Q2 period, increased 9% to $924 million, up from $849 million in Q2 2025.

The company also unveiled a refreshed global strategy centered on boneless chicken, beverages, sauces and greater menu personalization, with plans to roll out the new concept across its top 20 markets by the end of 2027.

For Habit Burger & Grill, system-wide sales increased 7% and same-store sales increased 3%. Six new locations also opened during the quarter. For the Q2 period, revenue increased 4 percent to $139 million, up from $134 million in Q2 2025.

Digital

Digital continues to be a bright spot for Yum and remained a major growth driver. Excluding Pizza Hut, digital system sales approached $9 billion during the quarter as more than 60% of system-wide sales came through digital channels. For the first half of 2026, digital sales have reached $17 billion, Turner said. The company will continue to focus its efforts on digital growth through Byte, Yum's proprietary AI-enabled technology platform.

"Scaling Byte puts Yum on a common technology foundation across every channel, simplifying operations and allowing teams in each market to manage menus, pricing, promotions, and store hours across all our ordering channels via a single platform," Turner said. "This reduces operational execution risk, increases pricing and promotional agility, and leads to a more consistent guest experience. Byte integration also enables our brands to recognize loyalty members, regardless of the channel they choose to order from, while enabling more personalized experiences over time. This control allows us to innovate more quickly, scale innovations, and own the data that gives us greater visibility into restaurant operations without being at the mercy of third parties."

Pizza Hut sale continues

Yum also announced in its Q2 earnings that its strategic review of Pizza Hut is effectively complete. The company has entered definitive agreements to sell:

Pizza Hut outside Mainland China to LongRange Capital.
Pizza Hut Mainland China to Yum China.

CEO Chris Turner said the transaction will allow Yum Brands to become a more focused organization while giving Pizza Hut an ownership structure better suited to its long-term growth. Pizza Hut revenue for the Q2 period, increased 6% to $254 million, up from $239 million in Q2 2025.

However, Pizza Hut continued to stall behind the company's other brands as same-store sales declined 1% globally and U.S. system-wide sales declined 5% during the quarter.

Despite those challenges, Pizza Hut opened 333 new restaurants across 33 countries.

"Before closing, I want to thank the Pizza Hut team members and franchise partners around the world for the role they have played in building one of the most iconic restaurant brands in the world. Their passion, resilience, and commitment have been central to Pizza Hut's legacy, and we are grateful for their partnership," Turner said toward the end of the call. "Yum will enter its next chapter of growth as a more focused company, taking advantage of the long runway for development, category expansion, and digital growth across our brands."