A month has gone by since the last earnings report for Yum Brands (YUM Quick QuoteYUM - Free Report) . Shares have added about 4.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Yum due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

YUM! Brands Q1 Earnings and Revenues Lag Estimates

YUM! Brands reported dismal first-quarter 2022 results, wherein earnings and revenues missed the Zacks Consensus Estimate. The top line lagged the consensus mark after beating the same in the trailing 10 quarters.

The company's results in the quarter benefited from strong digital sales, robust unit development and a diversified global business model. During the quarter, the company reported digital sales of more than $6 billion, up 15% year over year.

Earnings and Revenue Discussion

During first-quarter 2022, the company's adjusted earnings of $1.05 missed the Zacks Consensus Estimate of $1.07. In the prior-year quarter, the company had reported adjusted earnings of $1.07.

Quarterly revenues of $1,547 million lagged the consensus mark of $1,596 million. However, the top line increased 4% year over year. The upside can be attributed to an increase in franchise and property revenues.

Worldwide system sales — excluding foreign currency translation — improved 8% year over year, with Taco Bell, KFC and Pizza Hut rising 8%, 9% and 3%, respectively, year over year.

Divisional Performance

YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.

For first-quarter 2022, revenues from KFC totaled $660 million, up 6% year over year. Comps in the division increased 3% year over year compared with growth of 8% reported in the prior-year quarter.

The segment's operating margin declined 400 basis points (bps) year over year to 44.1%. In the quarter under review, KFC Division opened 587 gross new restaurants.

At Pizza Hut, revenues amounted to $244 million, down 3% on a year-over-year basis. Comps in the quarter were flat year over year.

The segment's operating margin expanded 140 bps year over year to 42.1%. Pizza Hut Division opened 334 gross new restaurants in the first quarter.

Taco Bell's revenues were $517 million, up 6% from the year-ago quarter's levels. Comps in the segment increased 5% year over year compared with 9% growth reported in the year-ago quarter. Its operating margin declined 70 bps year over year to 35.7%.

Taco Bell opened 63 gross new restaurants in the quarter under review.

The Habit company sales amounted to $122 million during the first quarter. Comps in the division increased 3% year over year. In the quarter under review, the company opened 13 gross new restaurants in the United States and Cambodia.

Other Financial Details

As of Mar 31, 2022, cash and cash equivalents totaled $365 million compared with $486 million on Dec 31, 2021. Long-term debt at the end of the reported quarter was $11,332 million compared with $11,178 million at the 2021-end.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -9.12% due to these changes.

VGM Scores

At this time, Yum has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Yum has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Yum is part of the Zacks Retail - Restaurants industry. Over the past month, McDonald's (MCD Quick QuoteMCD - Free Report) , a stock from the same industry, has gained 0.6%. The company reported its results for the quarter ended March 2022 more than a month ago.

McDonald's reported revenues of $5.67 billion in the last reported quarter, representing a year-over-year change of +10.6%. EPS of $2.28 for the same period compares with $1.92 a year ago.

McDonald's is expected to post earnings of $2.46 per share for the current quarter, representing a year-over-year change of +3.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.

McDonald's has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.