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YUM! Brands (YUM) to Report Q3 Earnings: What's in the Offing?
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Yum! Brands, Inc. (YUM - Free Report) is scheduled to release third-quarter 2023 results on Nov 1, before the opening bell. In the last reported quarter, the company reported an earnings surprise of 14.6%.
How Are Estimates Trending?
The Zacks Consensus Estimate for third-quarter earnings per share (EPS) is pegged at $1.26, indicating growth of 15.6% from $1.09 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at $1.8 billion, suggesting growth of 8.1% from the prior-year quarter’s figure.
Let's take a look at how things have shaped up in the quarter.
Factors at Play
Yum! Brands’ third-quarter top line is expected to increase year over year, courtesy of strong same-store sales growth, Taco Bell performance and unit expansion efforts. This and the emphasis on menu strategy (of Culinary Forward limited time offerings), the adoption of recommended ordering (an AI machine learning module) and marketing campaigns are likely to have aided the company's performance in the to-be-reported quarter.
Solid contributions from the KFC Division, Taco Bell Division, Pizza Hut Division and Habit Burger Grill Division are likely to have aided the company’s top line in the third quarter. For the said quarter, our model predicts Pizza Hut, Taco Bell and Habit Burger revenues to increase 2.8%, 8.1% and 12.8% year over year to $243.6 million, $614 million and $147.8 million, respectively. Our model predicts KFC revenues to rise 8.7% year over year to $765.1 million.
Higher labor costs and commodity inflation are likely to have hurt margins in the third quarter. Our model predicts that the company’s restaurant expenses would be $445.1 million, up 10.7% year over year. Per the model, general and administrative expenses are expected to increase 1% year over year to $263.6 million.
What Our Model Says
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 odds of an earnings beat.
Earnings ESP: YUM! Brands has an Earnings ESP of +1.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +1.87% and a Zacks Rank #1.
The stock has jumped 231% in the past year. ANF’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 724.8%.
McDonald's Corporation (MCD - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #3.
Shares of MCD have declined 3.5% in the past year. MCD’s earnings beat estimates in each of the trailing four quarters, the average surprise being 9.5%.
The Wendy's Company (WEN - Free Report) has an Earnings ESP of +2.30% and a Zacks Rank of 3.
WEN’s earnings for the to-be-reported quarter are expected to increase 8.3% year over year. The company reported better-than-expected earnings in the trailing four quarters, the average surprise being 4.8%.
Image: Bigstock
YUM! Brands (YUM) to Report Q3 Earnings: What's in the Offing?
Yum! Brands, Inc. (YUM - Free Report) is scheduled to release third-quarter 2023 results on Nov 1, before the opening bell. In the last reported quarter, the company reported an earnings surprise of 14.6%.
How Are Estimates Trending?
The Zacks Consensus Estimate for third-quarter earnings per share (EPS) is pegged at $1.26, indicating growth of 15.6% from $1.09 registered in the year-ago quarter.
For revenues, the consensus mark is pegged at $1.8 billion, suggesting growth of 8.1% from the prior-year quarter’s figure.
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’ third-quarter top line is expected to increase year over year, courtesy of strong same-store sales growth, Taco Bell performance and unit expansion efforts. This and the emphasis on menu strategy (of Culinary Forward limited time offerings), the adoption of recommended ordering (an AI machine learning module) and marketing campaigns are likely to have aided the company's performance in the to-be-reported quarter.
Solid contributions from the KFC Division, Taco Bell Division, Pizza Hut Division and Habit Burger Grill Division are likely to have aided the company’s top line in the third quarter. For the said quarter, our model predicts Pizza Hut, Taco Bell and Habit Burger revenues to increase 2.8%, 8.1% and 12.8% year over year to $243.6 million, $614 million and $147.8 million, respectively. Our model predicts KFC revenues to rise 8.7% year over year to $765.1 million.
Higher labor costs and commodity inflation are likely to have hurt margins in the third quarter. Our model predicts that the company’s restaurant expenses would be $445.1 million, up 10.7% year over year. Per the model, general and administrative expenses are expected to increase 1% year over year to $263.6 million.
What Our Model Says
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 odds of an earnings beat.
Earnings ESP: YUM! Brands has an Earnings ESP of +1.80%. 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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Poised to Beat on Earnings
Here are some other stocks worth considering from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.
Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +1.87% and a Zacks Rank #1.
The stock has jumped 231% in the past year. ANF’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 724.8%.
McDonald's Corporation (MCD - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #3.
Shares of MCD have declined 3.5% in the past year. MCD’s earnings beat estimates in each of the trailing four quarters, the average surprise being 9.5%.
The Wendy's Company (WEN - Free Report) has an Earnings ESP of +2.30% and a Zacks Rank of 3.
WEN’s earnings for the to-be-reported quarter are expected to increase 8.3% year over year. The company reported better-than-expected earnings in the trailing four quarters, the average surprise being 4.8%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.