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Factors Setting the Tone For YUM! Brands (YUM) Q4 Earnings

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YUM! Brands, Inc. (YUM - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 8, before the opening bell. In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 15.1%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $1.08, indicating a decline of 6.1% from the prior-year quarter. The consensus mark for revenues stands at $1.87 billion, suggesting growth of 7.5% from $1.74 billion in the prior-year quarter.

Factors to Note

Yum! Brands’ fourth-quarter performance is likely to have benefited from a focus on off-premise channels, menu innovations and strategic investments in digital technology. Yum! Brands’ partnership with online food delivery platform Grubhub continues to enhance online sales and delivery from its restaurants. At the end of the third quarter of 2021, the company had more than 41,000 restaurants offering delivery globally.

Despite the pandemic-induced challenging environment, the company impressed investors with robust same-store sales growth in third-quarter 2021 and the trend is likely to have continued in the fourth quarter. The company might have gained from robust sales momentum in North America, the U.K., and Australia, along with improved performance in Europe.

The company has been benefiting from robust unit expansion. During the first, second and third-quarter 2021, the company opened 435, 603 and 760 net new units, respectively. Master franchise agreements in Brazil (Taco Bell), Spain (Taco Bell), and Russia (Pizza Hut), and the international growth alliance with Telepizza to accelerate the development of Pizza Hut in key European markets and consolidate franchisees in Latin America and the Caribbean continues to drive growth.

The robust performance of Taco Bell, Pizza Hut and KFC bode well. Taco Bell recorded 74 gross new restaurant openings in third-quarter 2021. In an effort to drive long-term growth, Taco Bell has been expanding into several category entry points, which include the re-launch of breakfast in August and the fried chicken category with the Crispy Chicken Sandwich Taco.

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 predicts 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 +0.62%. 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.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Retail-Wholesale sector that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat in the quarter to be reported:

Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +3.62% and a Zacks Rank #3.

Shares of Dave &Buster's have gained 10.6% in the past six months. PLAY’s earnings topped the consensus mark in each of the trailing four quarters, the average surprise being 218.3%.

Chipotle Mexican Grill, Inc. (CMG - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #3.

Shares of Chipotle have gained 0.3% in the past year. CMG’s earnings beat the consensus mark in each of the trailing three quarters.

The ONE Group Hospitality, Inc. (STKS - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank #3.

Shares of The ONE Group have soared 202.8% in the past year. STKS’ earnings beat the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 30.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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