Caterpillar tariff warning, Yum misses, Marriott cuts outlook

Yahoo

2 days ago

Yahoo Finance Senior Reporter Brooke DiPalma joins Morning Brief with Julie Hyman to share the latest on earnings for Caterpillar (CAT), Yum Brands (YUM), and Marriott (MAR).
To watch more expert insights and analysis on the latest market action, check out more Morning Brief.
Caterpillar, Brooke, that is talking about, uh, tariff effect on its business.
Yeah, AI and everything else here. When you think about Caterpillar, of course, that yellow and black iconic behind the bulldozers, behind construction, you see that stock under pressure in early hours, extended hours here this morning. And what we heard in the presentation that Caterpillar put on their investor website is that tariffs are expected to net incremental tariffs are around 1.3 billion to 1.5 billion. That's expected to hit the company this year. They said that that includes as much as 500 million this upcoming quarter alone. And this is a stock that has been under pressure as we continue to make way into the year as we try to understand what exactly these tariffs mean for these manufacturing companies. The company also did say that those tariffs, they drove up manufacturing costs for the company. That hit profit even as sales volumes remained steady. So it's clearly we're seeing some of the tariff impact show up for these companies. And now keep in mind after that extended deadline, the CEO saying on the call this morning that this is expected to now hit the company come August 7th when that deadline shows up.
And, and then, Brooke, also on the earnings front, I know you're watching everything consumer, as you do, uh, what are we hearing on that front in terms of earnings this morning?
Yeah, internationally, the consumer does well, but here in the US we're seeing a softening and that was reiterated this morning with both Yum Brands as well as Marriott. This international growth offsetting a slowdown here in the US. And taking a closer look at the US same-store sales growth for Yum Brands, what we saw was an ongoing continuation of Taco Bell really outperforming its peers, KFC and Pizza Hut. What we saw there was Taco Bell was the only sore, uh, only segment of the Yum Brands, uh, business that saw same-store sales up. And then we saw a decline of 5% from both Pizza Hut, as well as KFC here in the US, especially as they really try to drum up excitement. We know that KFC is falling behind the competition when it comes to the chicken business, when it comes to, you know, up and coming competitors as well, like Dave's Hot Chicken among others. And what we saw is in from Marriott International, that they actually cut their full year forecast for revenue growth and profit. They cited a slowdown in demand for travel here in the US, but once again international, they did say that that offset some of the slowdown that we're seeing here.