Latest news with #BytebyYum!
Yahoo
06-05-2025
- Business
- Yahoo
YUM Q1 Earnings Call: Digital Investments and Global Expansion Drive Mixed Results
Fast-food company Yum! Brands (NYSE:YUM) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 11.8% year on year to $1.79 billion. Its non-GAAP profit of $1.30 per share was 1.4% above analysts' consensus estimates. Is now the time to buy YUM? Find out in our full research report (it's free). Revenue: $1.79 billion vs analyst estimates of $1.83 billion (11.8% year-on-year growth, 2.6% miss) Adjusted EPS: $1.30 vs analyst estimates of $1.28 (1.4% beat) Adjusted EBITDA: $620 million vs analyst estimates of $636.1 million (34.7% margin, 2.5% miss) Operating Margin: 30.7%, down from 32.5% in the same quarter last year Free Cash Flow Margin: 18.6%, down from 19.6% in the same quarter last year Locations: 60,886 at quarter end, up from 59,129 in the same quarter last year Same-Store Sales rose 3% year on year (-3% in the same quarter last year) Market Capitalization: $40.83 billion Yum! Brands' first quarter results showed sales growth driven by strong performances from Taco Bell U.S. and KFC International, while Pizza Hut and Habit Burger faced more muted trends. Management attributed this momentum to increased digital engagement—particularly through the Byte by Yum! digital platform—and successful marketing campaigns that broadened customer appeal. CEO David Gibbs highlighted, 'Taco Bell saw a significant expansion in consumer penetration, reflecting our efforts to elevate our positioning and broaden our relevance.' Looking ahead, management emphasized ongoing investments in artificial intelligence and technology partnerships, such as the new collaboration with NVIDIA, as key pillars for future growth. Gibbs added that these digital initiatives, combined with continued menu innovation and international expansion, are expected to support operating profit targets despite economic uncertainty and a competitive environment. The company is also preparing for a leadership transition, with Gibbs set to retire next year, stressing that 'the business is in a position of strength' for a smooth handover. Yum! Brands' management discussed the factors behind the company's first quarter performance and outlined key strategic initiatives shaping the business. Deviation from Wall Street's expectations was primarily due to revenue falling short amid ongoing investments and selective softness in some brands. Taco Bell's Value and Innovation: Taco Bell U.S. achieved notable same-store sales growth driven by value menu offerings and new product launches, including the Luxe Box lineup and specialty beverages like those at the Live Mas Cafe test. KFC International's Expansion: KFC International continued its footprint growth, opening 554 new locations, and posted traffic gains in core markets such as China and Korea, fueled by menu innovation and value-focused promotions. Digital Transformation: The Byte by Yum! digital platform expanded across brands, increasing digital sales and engagement. Management cited upcoming AI-driven personalization and operational tools as core to restaurant efficiency and customer experience. Leadership Changes: Meg Farren was appointed President of Taco Bell North America, and Catherine Tan-Gillespie became President of KFC U.S., both expected to drive operational improvements and brand growth. NVIDIA Partnership: A partnership with NVIDIA aims to accelerate AI capabilities in drive-thru automation, computer vision, and analytics, supporting Yum! Brands' goal of making AI integral to restaurant operations. Management's outlook for the remainder of the year centers on leveraging technology, expanding global presence, and maintaining value-driven menus to support profit growth amid unpredictable consumer and geopolitical conditions. Digital and AI Integration: Ongoing investment in digital platforms and AI, including the Byte by Yum! platform and NVIDIA partnership, is expected to drive operational efficiencies and customer engagement. Unit Development and Franchise Strength: Continued global store expansion, especially in KFC and Taco Bell, supported by well-capitalized franchisees, is seen as a key revenue driver even if economic conditions worsen. Brand Diversification: Efforts to improve performance at Pizza Hut and Habit Burger, alongside the strong contributions from Taco Bell and KFC, are intended to provide more balanced growth and reduce risk from reliance on a few brands. Brian Bittner (Oppenheimer): Asked about the sustainability of KFC International trends amid geopolitical concerns; management replied that growth was broad-based, and no significant anti-American sentiment was observed. David Tarantino (Baird): Pressed on the confidence behind back-half weighted profit growth; CFO Chris Turner noted planned cost reductions and margin recovery at Pizza Hut would support the outlook. Dennis Geiger (UBS): Queried about confidence in store development targets despite macro headwinds; management pointed to franchisee strength and robust Q1 gross openings as supporting factors. David Palmer (Evercore ISI): Inquired about the potential for Byte by Yum! to become an external revenue source and expansion of the Saucy concept; management said current focus is internal, with future external opportunities possible, and that Saucy expansion will be methodical. John Ivankoe (JPMorgan): Asked about the uniqueness of the NVIDIA partnership; CEO Gibbs emphasized the proprietary scale of Yum!'s tech stack and the broad scope of AI initiatives under development. In the coming quarters, key areas to monitor include (1) the pace of Byte by Yum! digital platform adoption across brands and geographies, (2) execution of new store openings and franchisee investments, and (3) margin performance as AI-enabled tools are deployed and menu innovations are rolled out. Progress in revitalizing Pizza Hut and Habit Burger, as well as results from the NVIDIA AI partnership, will also be tracked to gauge their contributions to Yum! Brands' profitability and global reach. Yum! Brands currently trades at a forward P/E ratio of 23.8×. In the wake of earnings, is it a buy or sell? Find out in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. 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Yahoo
12-03-2025
- Business
- Yahoo
Yum! Brands (NYSE:YUM) Unveils Instagram-Worthy Pizza Charcuterie with US$25 Offer at Pizza Hut
Yum! Brands recently introduced the innovative "Pizza Charcuterie" through its Pizza Hut chain in collaboration with Robert Gronkowski, positioning itself for heightened customer engagement and social buzz. This launch, alongside a 6% quarterly dividend increase and robust Q4 earnings growth, likely propelled a 13% share price increase over the last quarter despite the decline in net income. Additionally, Yum! Brands' significant share repurchase and the introduction of the "Byte by Yum!" AI platform to enhance operations further underline the company's strategic initiatives to boost shareholder value. The broader market's mixed performance, including an encouraging CPI report that lifted tech stocks, might have also supported favorable conditions, even amid economic uncertainty. Overall, the company's proactive approach in product innovation, dividend policy, and tech enhancements seem to have aligned with positive market sentiment, leading to a strong quarterly performance for its stock. Discover the key vulnerabilities in Yum! Brands' business with our detailed risk assessment. Interested In Other Possibilities? Find companies with promising cash flow potential yet trading below their fair value. Yum! Brands' shares have delivered a significant 162.67% total return over the last five years, an indication of strong shareholder engagement during the period. Key events contributing to this include a major dividend increase of 11% in early 2024 followed by another 6% raise in 2025, reflecting a commitment to return value to shareholders. The introduction of the 'Byte by Yum!' AI platform in February 2025 exemplifies their emphasis on leveraging technology for better operations. Additionally, robust earnings reports in late 2024 highlighted a substantial US$326 million increase in revenue over the previous year, notwithstanding a decline in net income. Share buybacks also played a crucial role, with a US$114.09 million tranche completed in early 2025, indicating the company's confidence in its stock value. These initiatives aligned with exceeded market expectations in the past year, as Yum! surpassed both the US market and Hospitality industry, reinforcing investor confidence in its long-term prospects. Have a stake in Yum! Brands? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:YUM. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
Yahoo
07-02-2025
- Business
- Yahoo
Yum Brands Inc (YUM) Q4 2024 Earnings Call Highlights: Digital Sales Surge and Taco Bell's ...
System Sales Growth: 5% in Q4, driven by 5% net new unit growth and 1% same-store sales growth. Core Operating Profit Growth: 8% for the full year. Digital Sales Growth: Approximately 15% in 2024, reaching over $30 billion. Taco Bell Core Operating Profit: Over $1 billion for the first time. KFC Unit Growth: 7% for the full year. KFC Same-Store Sales: Flat in Q4, with international same-store sales improving to +1%. Taco Bell Same-Store Sales Growth: 5% in Q4, outpacing the US industry by 5 percentage points. Pizza Hut System Sales Decline: 1% for the full year. Habit Burger Same-Store Sales: Improved in Q4, with restaurant-level margins reaching 10% in 2024. Net New Unit Growth: 5% for the full year, with over 4,500 new units opened. Restaurant-Level Margins: Improved by 20 basis points year-over-year to 17.6% in Q4. Ex Special EPS: $1.52 for Q4. Dividend Increase: Quarterly dividend increased to $0.71 per share. Share Repurchases: Approximately 3.3 million shares repurchased for $440 million in 2024. Net Leverage Ratio: Ended the year at 4.0 times. Warning! GuruFocus has detected 5 Warning Sign with HSY. Release Date: February 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Yum Brands Inc (NYSE:YUM) achieved over 50% of system sales through digital channels, highlighting strong digital engagement. Taco Bell US delivered exceptional performance, significantly outperforming the industry with a 5% year-over-year increase in same-store sales in Q4. The company introduced Byte by Yum!, a comprehensive proprietary technology platform to enhance consumer experiences and streamline operations. KFC International and Taco Bell US, which represent 80% of divisional operating profit, delivered strong system sales and operating profit growth. Yum Brands Inc (NYSE:YUM) achieved 8% core operating profit growth for the full year, demonstrating the resilience of its business model. Pizza Hut experienced a 1% decline in full-year system sales, with US sales under pressure due to increased value competition. Same-store sales for KFC declined by 2% for the full year, despite unit growth. The company faced challenges in the Middle East, impacting system sales growth due to regional conflicts. Yum Brands Inc (NYSE:YUM) terminated franchise agreements in Turkey, resulting in the removal of 538 units from its count. The effective tax rate increased to 23.5%, higher than the previously communicated range, impacting net income. Q: Can you discuss the health of international franchisees and how it impacts your growth trajectory for 2025? A: David Gibbs, CEO, explained that international markets are improving, with KFC seeing a recovery in the Middle East and strong performance in markets unaffected by conflicts. Chris Turner, CFO, added that the overall health of the franchise base is strong, evidenced by the gross unit growth of 4,500 units, despite some challenges. Q: How do you plan to achieve the 8% core operating profit growth in 2025, given the expected unit growth below the 5% algorithm due to Turkey closures? A: David Gibbs, CEO, stated that the growth will be driven by the twin growth engines, KFC International and Taco Bell US, which have strong momentum. The Turkey closures have minimal impact on royalties, and the company is confident in achieving the 8% profit growth target. Q: What is the long-term outlook for G&A expenses as a percentage of system sales? A: Christopher Turner, CFO, mentioned that G&A expenses are expected to increase by a low single-digit percentage in 2025, with a mid-single-digit increase due to incentive compensation resets. Over the long term, G&A as a percentage of system sales should decrease as the company continues to grow. Q: What are the plans for Scott Mezvinsky as the new leader of KFC, and how will he improve the US business? A: David Gibbs, CEO, expressed excitement about Scott's leadership, highlighting his experience and success at Taco Bell. The focus will be on modernizing the consumer experience, enhancing digital engagement, and testing new concepts like the Saucy by KFC to drive long-term growth. Q: Can you elaborate on the Byte technology platform and its impact on franchisees compared to an outsourced model? A: David Gibbs, CEO, emphasized the benefits of having an integrated tech stack under Byte, which reduces friction and provides franchisees with a turnkey solution. Christopher Turner, CFO, added that Byte enables faster deployment of new capabilities, driving top-line and bottom-line growth for both franchisees and Yum!. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
