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Yum Brands Beats Earnings Estimates as Taco Bell Sales Suffer From E. coli Outbreak
Yum Brands tops earnings estimates as Taco Bell sales suffer from a food-safety outbreak.
Key points
- Adjusted earnings of $1.56 per share beat the $1.49 expected, according to an LSEG analyst survey.
- Taco Bell's same-store sales are up about 1% so far in the fourth quarter, CFO Ranjith Roy said.
- KFC's U.S. system sales shrank 6% in the quarter, and the U.S. is now its third-largest market.
Why it matters. Yum says Taco Bell has rebounded since the outbreak, but KFC's U.S. business remains weak, which may keep the company's North American results under scrutiny for investors.
Yum Brands on Tuesday reported adjusted earnings of $1.56 per share against $1.49 expected, though a cyclospora outbreak tied to iceberg lettuce hurt Taco Bell. Net sales rose 4% to $2.05 billion, matching analyst expectations surveyed by LSEG, while Taco Bell's same-store sales fell 4% as diners pulled back. CEO Chris Turner said in a statement that Taco Bell U.S. has outpaced the quick-service restaurant industry since the end of September.
Latest updates
Yum Brands Beats Earnings Estimates as Taco Bell Sales Suffer From E. coli Outbreak
Yum Brands, the parent company of Taco Bell, KFC and Pizza Hut, reported earnings that beat analyst estimates. Taco Bell's same-store sales nonetheless declined during the quarter. The company attributed the drop to a cyclospora outbreak linked to lettuce served at its restaurants, which reduced customer traffic. Cyclospora is a parasite that causes intestinal illness, and the outbreak has drawn attention to food safety practices in the fast-food supply chain. The excerpt does not specify the number of illnesses or the timing of the recovery in traffic. Investors will watch whether Taco Bell's sales rebound in coming quarters.
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