YUM! Brands, Inc. ( YUM Quick Quote YUM - Free Report) reported mixed first-quarter 2023 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same. The top and the bottom lines increased on a year-over-year basis. Following the results, the shares of the company declined 2.4% in the pre-market trading session on May 3. David Gibbs, CEO of YUM! Brands, stated, “The demand for our iconic brands is evident as our incredible teams and franchise partners delivered another strong quarter with system sales growth of 13% excluding Russia, driven by 8% same-store sales growth and continued development momentum. We're seeing broad-based accelerating digital sales growth leading to a record quarter for both digital system sales of nearly $7 billion and digital sales mix that exceeded 45%.” Earnings and Revenue Discussion
In first-quarter 2023, the company's adjusted earnings per share (EPS) came in at $1.06, missing the Zacks Consensus Estimate of $1.14. In the prior-year quarter, the company reported an adjusted EPS of $1.05.
YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.
For first-quarter 2023, revenues from KFC totaled $687 million compared with $660 million reported in the prior-year quarter. Comps in the division increased 9% year over year compared with 3% growth reported in the previous quarter. The segment's operating margin increased 30 basis points (bps) year over year to 44.4%. In the quarter under review, the KFC Division opened 385 gross new restaurants in 47 countries. At Pizza Hut, revenues amounted to $254 million, up 4% year over year. Comps in the quarter increased 7% year over year, on par with the prior-year quarter. The segment's operating margin declined 90 bps year over year to 41.2%. Pizza Hut Division opened 271 gross new restaurants in 31 countries in the quarter under review. Taco Bell's revenues were $572 million, up 11% from the year-ago quarter's levels. Comps in the segment increased 8% year over year compared with 5% growth reported in the year-ago quarter. Its operating margin declined 10 bps year over year to 35.6%. Taco Bell opened 79 gross new restaurants in 16 countries in the quarter under review. In the first quarter, the Habit Burger Grill division’s revenues amounted to $132 million compared with $126 million reported in the previous quarter. Comps in the division grew 3%, on par with the prior-year quarter. In the quarter under review, the division opened 11 gross new restaurants in the United States and Cambodia. Other Financial Details
As of Mar 31, 2023, cash and cash equivalents totaled $349 million compared with $367 million at 2022-end. Long-term debt, as of Mar 31, 2023, was $11,349 million compared with $11,453 million as of 2022-end.
The company announced a hike in its quarterly dividend payout. The company raised the quarterly dividend to 60 cents per share (or $2.42 annually) from the previous payout of 57 cents (or $2.28 annually). The hiked dividend was paid out on Mar 10 to shareholders of record as of Feb 22. Zacks Rank & Key Picks
YUM currently carries a Zacks Rank #3 (Hold). You can see
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