Yum! Brands, Inc. (YUM Quick QuoteYUM - Free Report) delivered first-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Following the results, the company’s shares are up nearly 1% in the pre-market trading session today.

The company reported adjusted earnings per share of $1.50, up 15.4% year over year and above the Zacks Consensus Estimate of $1.39 by 7.9%. Revenues increased 15.2% to $2.06 billion and topped the $2.01 billion estimate by 2.6%.

Results were powered by Taco Bell’s standout 8% same-store sales gain, while worldwide system sales grew 6% excluding foreign currency translation, signaling steady demand across much of the portfolio.

YUM Starts 2026 With Solid Global Momentum

YUM’s top-line strength extended beyond a single brand. Worldwide same-store sales grew 3% in the quarter, complementing system sales growth and underscoring a consumer environment that remained supportive for the company’s quick-service concepts.

Expansion also contributed. Unit count increased 5% year over year, supported by 1,030 gross new units opened in the quarter, keeping development activity aligned with the company’s long-term growth algorithm.

Yum! Brands Builds on KFC's Scale and Profitability

KFC continued to be a steady growth and cash-generation engine. The division’s restaurant count climbed 7% year over year to 34,332, reflecting broad-based expansion across markets.

Operationally, KFC delivered higher profitability. For first-quarter 2026, revenues from KFC totaled $879 million, up 14% from the prior-year quarter. Our model predicted the metric to increase 13.2% year over year. Comps in the division rose 2% year over year.

Franchise and property revenues rose 13% to $461 million, while operating profit increased 16% to $383 million. Operating margin improved 70 basis points to 43.6%, helped by stronger company-owned restaurant margins of 10.3%, up 100 basis points.

YUM Leans on Taco Bell for Consistent Growth

Taco Bell extended its growth streak with continued brand momentum. The division’s restaurant base increased 3% to 9,021, reflecting ongoing development progress even as the concept remained in a relatively mature stage in the United States.

Financial performance stayed firm. Taco Bell's revenues were $797 million, up 21% from the year-ago quarter's levels. Our model predicted the metric to increase 8.5% year over year. Comps in the segment increased 8%.

System sales increased 10% to $4,394 million, and franchise and property revenues advanced 7% to $251 million. Operating profit rose 16% to $281 million, though operating margin declined 150 basis points to 35.2%, suggesting less favorable cost leverage. The division opened 30 gross new restaurants and U.S. company-owned restaurant margins were 23.9%.

Yum! Brands Sees Pizza Hut Pressure, Habit Improves

Pizza Hut produced mixed results, with global stability masking notable regional divergence. The division’s restaurant count edged up 1% to 19,944, while system sales increased 3% to $3,114 million and same-store sales were flat overall.

At Pizza Hut, revenues amounted to $253 million, up 10% year over year. Our model predicted Pizza Hut revenues to increase 1.8% year over year. Comps in the quarter were flat year over year.

Profitability weakened at Pizza Hut, with operating profit down 14% to $64 million and operating margin contracting to 25.4%. Regionally, U.S. system sales declined 6% excluding foreign currency translation, while China system sales rose 8% on the same basis. Pizza Hut opened 346 gross new restaurants.

At Habit Burger & Grill, system sales increased 7% and same-store sales grew 5%, supported by six gross new restaurant openings. In the first quarter, the Habit Burger Grill division’s revenues amounted to $130 million compared with $128 million reported in the prior-year quarter. Our model predicted the metric to be $129.4 million. Comps in the division grew 5% year over year.

YUM Highlights Cash Generation and Notable Items

Below the segment line, YUM reported GAAP net income of $432 million and GAAP diluted earnings of $1.55 per share. The effective tax rate was 16.2%, and results comprised special items that shaped comparability, including $37 million of charges tied to the Pizza Hut strategic options review and $44 million of income from a litigation settlement.

Cash flow remained supportive of capital returns. Net cash provided by operating activities totaled $416 million, while capital spending was $75 million. The company repurchased $185 million of stock and paid $207 million in dividends, with dividends declared at $0.75 per share. On the balance sheet, cash and cash equivalents were $689 million at quarter's end, long-term debt totaled $10.21 billion and short-term borrowings rose to $1.74 billion from $38 million at Dec. 31, 2025.

YUM’s Zacks Rank

YUM! Brands currently has a Zacks Rank #3 (Hold).

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