Yum Brands has mixed results; Taco Bell performs strongly

• Taco Bell's same-store sales surged 7%, exceeding Wall Street's 5.6% growth estimate and solidifying its position as the strongest performer in Yum's portfolio
• KFC showed improvement with 3% global same-store sales growth, including 1% growth in the U.S. where it has been undergoing a turnaround after losing market share to competitors like Raising Cane's
• Pizza Hut's same-store sales fell 1% (3% decline in U.S.), prompting Yum to confirm it has begun exploring strategic options for the struggling chain

Yum Brands Reports Mixed Q4 Results; Taco Bell Leads Performance

Financial Performance:

Yum Brands reported fourth-quarter results that missed earnings expectations but exceeded revenue forecasts. The company posted net income of $535 million ($1.91 per share), with adjusted earnings of $1.73 per share (below estimates of $1.89). Revenue rose 6% to $2.51 billion, surpassing the expected $2.45 billion.

Key Brand Performance:

*Taco Bell* emerged as the portfolio standout, with same-store sales surging 7%, exceeding Wall Street's 5.6% forecast. The Mexican-inspired chain continues outperforming the broader fast-food industry through a combination of value offerings and innovative menu items.

*KFC* showed moderate improvement with 3% global same-store sales growth. International locations posted 3% growth while U.S. stores increased 1%, beating analyst expectations of 2.1%. The brand continues working to regain market share lost to competitors like Chick-fil-A and Raising Cane's in its home market.

*Pizza Hut* remained the weakest performer, with same-store sales declining 1%—driven by a 3% drop in the U.S. market. While slightly better than the anticipated 1.7% decline, the results underscore ongoing challenges for the pizza chain.

Strategic Developments:

Yum confirmed it has begun a strategic review of Pizza Hut, announced in November, though the company provided no timeline for completion.

Market Implications:

The results highlight Yum's growing dependence on Taco Bell's strength to offset Pizza Hut's struggles. Investors should monitor the Pizza Hut strategic review outcome and KFC's U.S. turnaround progress as key catalysts going forward.