Yum Brands Tops Estimates With Taco Bell Same-Store Sales Growth

Covid restrictions force sales declines in KFC and Pizza Hut chains

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Graham Griffin
Feb 04, 2021
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Quick-service restaurant parent Yum Brands Inc. (

YUM, Financial) has released its fourth-quarter report with positive revenue and earnings per share.

On Thursday, the company reported fourth-quarter revenue of $1.74 billion, beating Refinitiv estimates of $1.72 billion. Adjusted earnings per share showed an increase year over year at $1.15 per share and also beat estimates.


In a statement, Yum Brands CEO David Gibbs comented on the company's performance:

"Yum! enters 2021 a stronger company primed to profitably grow system sales this year and beyond. Despite the challenges of 2020, our full-year results demonstrated our resilience and validated the strategies we put in place during the transformation of Yum!. We intensified our focus on leveraging our scale and reinforcing our growth model, by accelerating our investments in digital and technology to enhance the customer experience and unit economics. In 2020, digital sales hit a record of $17 billion, about a 45% increase over the prior year and a testament to our brands' ability to quickly meet new consumer needs. I am more confident than ever in the ability of our teams and franchisees to compete and win in a rapidly changing world."

Despite its siblings' struggles, the company's Taco Bell division was able to increase same-store sales by 1%. According to CNBC, the majority of Taco Bell locations are in the United States, where the restaurants have bounced back at a more rapid pace during the ongoing pandemic. The operating margin for the quarter increased by 0.1% according to the report.

In comparison, KFC saw same-store sales decrease 2% during the quarter. The U.S. locations reported positive same-store sales increases, but they were offset by large declines across other international regions. The international locations totalled a 4% decline in same-store sales during the quarter.

Pizza Hut struggled alongside KFC, reporting an overall same-store sales decrease of 1% during the quarter. International locations contributed a 7% fourth-quarter decline and the franchise saw 540 restaurants close during the same period.

On Feb. 4, the stock was trading at $103.22 per share with a market cap of $31.14 billion. According to the GF Value Line, the stock is trading at fair value.


Top gurus investing in Yum Brands include Ken Fisher (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Jim Simons (Trades, Portfolio)' Renaissance Technologies, Pioneer Investments (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio).


Disclosure: Author owns no stocks mentioned.

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