It has been about a month since the last earnings report for Yum Brands (YUM Quick QuoteYUM - Free Report) . Shares have added about 7.7% 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 the most recent earnings report in order to get a better handle on the important catalysts.

YUM! Brands Q4 Earnings & Revenue Miss Estimates

YUM! Brands reported fourth-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. Revenues missed the consensus estimate for the third straight quarter.

Earnings and Revenue Discussion

In fourth-quarter 2023, the company's adjusted earnings per share (EPS) came in at $1.26, lagging the Zacks Consensus Estimate of $1.39. The metric decreased 5% year over year.

Quarterly revenues of $2,036 million missed the consensus mark of $2,116 million. However, the top line increased 1% year over year.

Worldwide system sales — excluding foreign currency translation — increased 5% year over year, with Taco Bell, KFC and Pizza Hut rising 6%, 7% and 1% year over year, respectively.

Divisional Performance

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

For fourth-quarter 2023, revenues from KFC totaled $761 million, down 4% year over year. Our model predicted the metric to increase 9.8% year over year. Comps in the division increased 2% year over year compared with 6% in the previous quarter.

The segment's operating margin increased 430 basis points (bps) year over year to 43.3%. In the quarter under review, the KFC division opened 1,067 gross new restaurants.

At Pizza Hut, revenues amounted to $281 million, down 2% year over year. Our model predicted the metric to increase 2.3% year over year. Comps in the quarter decreased 2% year over year.

The segment's operating margin increased 50 bps year over year to 35%. The Pizza Hut division opened 575 gross new restaurants.

Taco Bell's revenues were $819 million, up 7% year over year. Comps in the segment increased 3% year over year compared with 11% in the previous quarter. Its operating margin expanded 280 bps year over year to 34.9%.

Taco Bell opened 201 gross new restaurants in the quarter under review.

In the fourth quarter, the Habit Burger Grill division’s revenues amounted to $175 million, up 1.7% year over year. Our model predicted the metric to increase 10.3% year over year. Comps in the division declined 5% year over year. In the quarter under review, the division opened 10 gross new restaurants.

Other Financial Details

As of Dec 31, 2023, cash and cash equivalents totaled $512 million compared with $367 million at 2022-end. Long-term debt, as of Dec 31, 2023, was $11,142 million compared with $11,453 million as of 2022-end.

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, Yum has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. 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 F. 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. Notably, Yum has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Yum belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Chipotle Mexican Grill (CMG Quick QuoteCMG - Free Report) , has gained 2.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.

Chipotle reported revenues of $2.52 billion in the last reported quarter, representing a year-over-year change of +15.4%. EPS of $10.36 for the same period compares with $8.29 a year ago.

Chipotle is expected to post earnings of $11.34 per share for the current quarter, representing a year-over-year change of +8%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.4%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Chipotle. Also, the stock has a VGM Score of D.