Yum Brands' Sales Update for KFC and Pizza Hut

Yum Brands released its quarterly earnings on Tuesday, revealing a mixed performance as both Pizza Hut and KFC experienced declines in same-store sales. CEO David Gibbs attributed these challenges to the ongoing conflict in the Middle East and a shift towards more cost-conscious consumer behavior. However, he noted an improvement in sales trends in the U.S., driven by value offerings like Pizza Hut's $7 Deal Lovers. The company's financial results showed a second-quarter net income of $367 million, or $1.28 per share, down from $418 million, or $1.46 per share, a year earlier. Adjusted earnings per share came in at $1.35, slightly above Wall Street's expectation of $1.33. Revenue for the quarter reached $1.76 billion, falling short of the anticipated $1.8 billion, despite a 4% increase in net sales attributed to new restaurant openings. Yum's same-store sales fell by 1% overall, with Pizza Hut and KFC both reporting declines of 3%. While KFC saw a boost in system sales in China, its largest market, international same-store sales still dropped by 3%. In contrast, Taco Bell, which has a strong presence in the U.S., reported a 5% increase in same-store sales, benefiting from its reputation for value during a period of reduced consumer spending. In a strategic move, Yum announced plans to expand the use of artificial intelligence in Taco Bell's drive-thru operations across hundreds of U.S. locations by year-end. Additionally, approximately 200 of Yum's restaurants remain temporarily closed in the Middle East, Malaysia, and Indonesia, as reported by Chief Financial Officer Chris Turner.