Q1 2024 Yum! Brands Inc Earnings Call Transcript
Key Points
- Yum Brands Inc (YUM) reported a 6% growth in core operating profit this quarter, demonstrating resilience in a challenging operating environment.
- Digital sales continued to rise, reaching approximately $8 billion, an 11% increase year-over-year, with digital transactions now representing over 50% of system sales.
- The acquisition of 218 KFC franchise restaurants in the U.K. and Ireland is expected to add approximately $40 million of incremental EBITDA in the next 12 months.
- Yum Brands Inc (YUM) opened over 800 new units in the first quarter, including the milestone of KFC's 30,000th global restaurant, indicating strong development momentum.
- Significant advancements in proprietary digital and AI-powered platforms, with ongoing deployment across brands, enhancing operational efficiency and customer experience.
- Same-store sales faced pressures, including a 2% decline at KFC International, primarily due to impacts from the conflict in the Middle East.
- Pizza Hut division experienced a 4% decline in system sales and a 7% drop in same-store sales, continuing to face challenges in lapping previous year's high performance metrics.
- The Habit Burger Grill saw a 2% decline in system sales despite a 6% growth in unit numbers, indicating potential operational or market challenges.
- General and administrative expenses, although reduced by 4%, included $21 million related to ongoing resource optimization, indicating potential restructuring costs.
- Despite overall growth, the operating environment remains challenging with discrete consumer demand pressures and inflationary concerns impacting performance.
Hello, everyone, and welcome to the Yum! Brands, Inc. 2024 First Quarter Earnings Call. My name is Nadia, and I'll be coordinating the call today. (Operator Instructions).
I will now hand over to your host, Matt Morris, Head of Investor Relations to begin. Matt, please go ahead.
Thanks, operator. Good morning, everyone, and thank you for joining us. On our call today are David Gibbs, our CEO; Chris Turner, our CFO; and Dave Russell, our Senior Vice President and Corporate Controller. Following remarks from David and Chris, we'll open the call to questions.
Before we get started, please note that this call includes forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. All forward-looking statements are made only as of the date of this call and should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC. In addition, please refer to our earnings
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