Yum Brands reported disappointing quarterly earnings on Tuesday, falling short of analyst expectations as both Pizza Hut and KFC experienced declines in same-store sales across the U.S. For the period ending June 30, the company’s earnings per share were $1.44, slightly below the anticipated $1.46, while revenue reached $1.93 billion, just under the expected $1.94 billion, according to a survey by LSEG.
Yum’s net income for the second quarter amounted to $374 million, or $1.33 per share, an increase from $367 million, or $1.28 per share, during the same period last year. When excluding gains from refranchising and other factors, the adjusted earnings per share remained at $1.44. Notably, net sales climbed by 10 percent year-over-year.
The company has increasingly capitalized on digital transactions, which now account for 57 percent of total system sales, encompassing mobile app, delivery, and kiosk orders. Yum reported a 2 percent increase in same-store sales, a metric tracking restaurants open for at least 12 months.
“I’m proud that Yum Brands delivered another strong quarter in a tough consumer environment,” noted CEO David Gibbs during his final conference call before retirement. CFO Chris Turner will take over as CEO on October 1.
KFC’s same-store sales showed a modest 2 percent growth globally, primarily driven by its international markets, particularly China. However, KFC’s U.S. operations are struggling, with a 5 percent decline in same-store sales. The chain has slipped in the rankings, dropping from the No. 3 to No. 5 position among chicken chains in the U.S., now trailing behind Raising Cane’s and Wingstop. Executives acknowledged that KFC’s value messaging and new menu items have not resonated with consumers, prompting a leadership shakeup that includes Scott Mezvinsky stepping in as CEO and Catherine Tan-Gillespie as president of KFC U.S.
Meanwhile, Pizza Hut faced similar setbacks, with a global same-store sales dip of 1 percent and a 5 percent decline in the U.S. market. Increased competition and a softening consumer demand have contributed to these challenges. Gibbs pointed out that the chain’s U.S. sales have suffered due to an “insufficient value message,” but new promotions are being implemented to address these issues.
On a brighter note, Taco Bell, which is considered Yum’s flagship brand, reported a 4 percent increase in same-store sales, buoyed by the reintroduction of Crispy Chicken Nuggets and new chicken products. Taco Bell’s chicken sales have surged by 50 percent over the past two years, as the brand has successfully captured market share from fast-casual and fast-food competitors. “Most people are reporting negative quarters. We haven’t even had a negative week for Taco Bell,” Gibbs stated. However, analysts had anticipated a 5.2 percent growth in global same-store sales for Taco Bell, highlighting a gap between expectations and performance.
Yum Brands also expanded its restaurant footprint, increasing its total locations by 3 percent, attributed to 871 new openings, particularly within international KFC markets. The company continues to navigate a challenging operating environment, and as the story develops, further updates will follow.
Original Source: https://www.cnbc.com/2025/08/05/yum-brands-yum-q2-2025-earnings.html
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Publish Date: 2025-08-05 19:19:00
