Yum Brands Misses Earnings Estimates Despite Sales Boost

Yum Brands Misses Earnings Estimates Despite Sales Boost

Yum Brands (NYSE: YUM), a parent company to brands like KFC, Pizza Hut, and Taco Bell, reported mixed fourth-quarter financial results on Wednesday as increasing costs affected profits. However, shares climbed over 4% during early morning trading.

The American fast-food corporation reported earnings of USD1.02 per share, compared to the expected USD1.09 a share. Revenue totaled USD1.89 Billion, slightly higher than analysts anticipated USD1.88 Billion. The company also noted a fourth-quarter net income of USD330 Million, down from the previous year’s USD332 Million.

“The strong digital numbers come as a result of the investments we’ve been making… whenever you nearly double your digital sales in two years, I think that is evidence that those investments are paying off,” said David Gibbs, chief executive officer, on an earnings call.

Taco Bell experienced an 8% increase in same-store sales following past weaker quarters. KFC’s same-store sales jumped 5% within the quarter as demand for its revamped chicken sandwich remained strong. Meanwhile, Pizza Hut’s same-store sales shot up 3%.

“I think the good news is we believe, as [CEO David Gibbs] said, that we’re past the peak probably two or three weeks ago, and we were talking to our CEOs [Tuesday] that things have gotten significantly better in the last couple of weeks,” said Yum CFO Chris Turner.

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