KFC-parent Yum Brands tops same-store sales estimates as diners seek value meals

A closed sign is seen outside a KFC restaurant near Ashford, England. (Gareth Fuller/PA via AP

Yum Brands beat fourth-quarter comparable sales estimates on Wednesday, driven by strong demand for affordable meal options at Taco Bell stores in the U.S., as well as strength in its KFC international business.

Fast‑food chains such as Yum Brands and McDonald’s are leaning on value-focused meals to attract budget‑conscious diners who are cutting back on eating out. The company has raised prices of some items over the last few years amid sticky inflation.

Yum Brands’ worldwide same-store sales rose three per cent for the quarter ended Dec. 31, compared with analysts’ average estimate of a 2.74 per cent increase, according to data compiled by LSEG.

Taco Bell U.S. accounts for about 36 per cent of Yum Brands’ operating profits. Demand for its Tex-Mex cuisine-inspired tacos and wraps, as well as its combo meals ranging between US$5 to $11.99, helped drive up same-store sales at U.S. outlets by seven per cent in the quarter, beating estimates of a 6.5 per cent growth.

KFC’s worldwide same-store sales grew three per cent in the quarter, beating expectations, as Yum expands the chicken fast food chain’s international footprint with new store openings across key growing markets.

Meat-packers company Tyson Foods this week said demand for chicken is rising as people are turning to cheaper protein options due to soaring beef prices.

Yum Brands has also been exploring strategic options for its Pizza Hut chain, whose sales have now fallen for nine straight quarters, underscoring its struggles in a highly competitive fast-food industry. Pizza Hut’s sales were down five per cent for the full year in the U.S.

On an adjusted basis, profit for the quarter was $1.73 per share, compared with estimates of $1.77 per share.

(Reporting by Sanskriti Shekhar and Juveria Tabassum in Bengaluru, Waylon Cunningham in New York; Editing by Leroy Leo)