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YUM! Brands' (YUM) to Report Q1 Earnings: What's in Store?

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Yum! Brands, Inc. (YUM - Free Report) is scheduled to report first-quarter 2022 results on May 4, before the opening bell. In the last reported quarter, the company reported a negative earnings surprise of 5.6%.

How Are Estimates Trending?

The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.07 per share, indicating no change from the year-ago quarter reported figure.

For revenues, the consensus mark is pegged at $1,596 million, suggesting growth of 7.4% from the prior-year quarter’s figure.

Yum Brands, Inc. Price and EPS Surprise

 

Yum Brands, Inc. Price and EPS Surprise

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

 

Let's take a look at how things have shaped up in the quarter.

Factors at Play

Yum! Brands’ first-quarter 2022 performance is likely to have benefitted from its focus on unit development, on- and off-premise ordering channels and strategic investments in digital technology. This along with a focus on improving the nutritional value of its menu items coupled with its distinctive plant-based offerings (such as KFC's Beyond Fried Chicken in the U.S. and Pizza Hut’s Beyond Italian Sausage Crumbles in Canada) is likely to have boosted the company’s top line in the first quarter.

Increased focus on delivery service channel and e-commerce platform bodes well for the company. During the previous quarter, the company announced the acquisition of Dragontail order and delivery platform (covering KFC and Pizza Hut) to streamline the end-to-end food preparation process and optimize delivery routes for drivers. Also, it initiated the rollout of Quick Pick-Up (at KFC U.S.) and chat ordering (via Tictuk). Backed by solid customer acceptance (with respect to easy access to brands) coupled with the advancement of the digital and technology ecosystem, the initiatives are likely to have boosted the company’s performance in the to-be-reported quarter.

However, coronavirus-induced labor shortages, supply chain and consumer mobility challenges are likely to have negatively impacted the company’s performance in the first quarter. This along with rising consumer inflation levels is likely to have impacted margins in the to-be-reported quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for YUM! Brands this time around. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. But that's not the case here.

Earnings ESP: YUM! Brands has an Earnings ESP of -1.14%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #4 (Sell).

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 also have the right combination of elements to post an earnings beat:

Costco Wholesale Corporation (COST - Free Report) has an Earnings ESP of +1.39% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Costco Wholesale have gained 40.2% in the past year. COST’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 13.3%, on average.

Shake Shack Inc. (SHAK - Free Report) has an Earnings ESP of +6.85% and a Zacks Rank #3.

Shares of Shake Shack have declined 19.9% so far this year. SHAK’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 89.2%, on average.

Designer Brands Inc. (DBI - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3.

Shares of Designer Brands have declined 25.8% in the past year. DBI’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 112.8%, on average.

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