In a positive financial report released on Wednesday, Yum Brands exceeded analysts’ expectations for quarterly earnings and revenue, largely driven by robust performance from Taco Bell. The company reported adjusted earnings per share of $1.50, surpassing the anticipated $1.38. Revenue reached $2.06 billion, slightly ahead of the expected $2.04 billion.
For the first quarter, Yum Brands posted a net income of $432 million, or $1.55 per share, compared to $253 million, or 90 cents per share, during the same period last year. When excluding charges related to its strategic review of Pizza Hut and other items, the earnings per share came in at $1.50.
The 15% increase in net sales to $2.06 billion was primarily driven by higher revenue from company-owned restaurants. As part of its growth strategy, Yum Brands acquired over 100 Taco Bell locations in the Southeastern United States last year, aiming to enhance development and profitability. The overall global same-store sales climbed by 3%, spurred on by Taco Bell, which is often regarded as the crown jewel of Yum’s portfolio. Notably, Taco Bell achieved an impressive 8% growth in same-store sales, outpacing Wall Street’s expectations of 5.6%.
“The outstanding 8% same-store sales growth from Taco Bell significantly exceeds the quick-service restaurant industry averages and builds on a strong Q1 growth rate from 2025,” remarked Yum CEO Chris Turner.
In contrast, KFC experienced a more modest same-store sales growth of 2%, which fell short of the projected 2.5% increase. The international market continues to be seen as a key growth driver for KFC, although the U.S. division has faced challenges due to mounting competition and shifting consumer value perceptions, resulting in a 2% decline in U.S. system sales for the first quarter.
To regain customer interest, KFC is looking to adopt some successful strategies from Taco Bell, emphasizing innovation and pricing strategies. Pizza Hut’s performance remains a concern, with flat same-store sales reported globally. While the international markets saw a 2% increase in same-store sales, the U.S. market experienced a 4% decline, contrary to analysts’ forecasts of a 0.7% drop.
Earlier this year, Yum Brands announced a strategic review of Pizza Hut, which has lagged behind other chains in the portfolio for some time. Reports suggest that several private equity firms, including Apollo Global Management and Sycamore Partners, are potential buyers interested in acquiring Pizza Hut.
While no updates were provided on the strategic review during Yum’s earnings announcement, the financial release did indicate metrics concerning the company’s system sales, unit count, and core operating profit, excluding Pizza Hut, indicating a focused effort to improve overall performance amidst the challenges faced by the pizza chain.
