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Factors Setting the Tone For YUM! Brands' (YUM) Q2 Earnings

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YUM! Brands, Inc. (YUM - Free Report) is scheduled to report second-quarter 2021 results on Jul 29, before the opening bell. In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 25.9%.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter earnings per share is pegged at 95 cents, indicating growth of 15.9% from the prior-year quarter. The consensus mark for revenues stands at $1.47 billion, suggesting growth of 23% from $1.2 billion in the prior-year quarter.

Factors to Note

Yum! Brands’ second-quarter results are likely to reflect robust performance of Taco Bell, Pizza Hut and KFC. The company continues to benefit from focus on off-premise channels and strategic investments in digital technology. Taco Bell is not only gaining from expanding its presence but also from bolstered media presence with the launch of its loyalty program. The roll out of new e-commerce platform (in the KFC segment) and the omnichannel menu management system (in the Pizza Hut segment) are likely to have favored the second-quarter performance.

Menu innovation might have aided the top line. During the first-quarter, Habit restaurants added two new items, namely, Crispy Chicken Sandwich and Chicken Bites. KFC continues to focus on menu innovation through rebundling, repackaging and reconceptualizing core menu items.

Yum! Brands’ partnership with online food delivery platform Grubhub continues to enhance online sales and delivery from its restaurants. The company implemented various digital features in mobile and online platforms across all brand segments to enhance guest experience. It has been working toward making its delivery services faster and the results have been positive so far. At the end of first-quarter 2021, the company had more than 39,000 restaurants offering delivery globally, up 16% year over year.

Yum Brands, Inc. Price and EPS Surprise Yum Brands, Inc. Price and EPS Surprise

Yum Brands, Inc. price-eps-surprise | Yum Brands, Inc. Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Yum! Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Yum! Brands has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of -0.66%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Retail-Wholesale space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

BJ's Restaurants, Inc. (BJRI - Free Report) has an Earnings ESP of + 16.33% and a Zacks Rank #2.

Papa John's International, Inc. (PZZA - Free Report) has an Earnings ESP of +6.56% and a Zacks Rank #2.

Restaurant Brands International Inc. (QSR - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #2.

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