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YUM’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 3.6%.
Trend in the Estimate Revision of YUM
The Zacks Consensus Estimate for third-quarter earnings per share (EPS) is pegged at $1.47, indicating a decline of 7% from $1.58 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2.06 billion. The metric indicates a rise of 3.9% from the year-ago quarter’s figure.
Let us take a look at how things might have shaped up in the quarter to be reported.
Factors Likely to Shape YUM’s Quarterly Results
KFC is likely to have been a key contributor to Yum! Brands' top-line growth in third-quarter 2026. The brand continues to benefit from strong demand for chicken, international expansion and menu innovation. Its performance in markets such as the United Kingdom, Japan, Korea and Brazil reflects the benefits of locally relevant offerings and promotional initiatives. The introduction of new chicken tenders, an expanded range of sauces and the Kwench beverage platform is expected to have strengthened menu appeal and encouraged customer spending. Additionally, continued restaurant expansion, particularly in emerging markets, and growing loyalty program penetration are likely to have supported system sales.
Yum! Brands' expanding international presence, growing digital business and continued restaurant development are likely to have supported its third-quarter top line. Taco Bell International has been gaining traction in markets such as the United Kingdom, India and Canada, with localized menu offerings and digital engagement supporting growth. Meanwhile, the company's digital capabilities, including its Byte platform, loyalty programs and first-party ordering channels, have been helping strengthen customer relationships and drive sales. KFC's aggressive restaurant expansion also remains an important growth driver, with management expecting the brand to deliver its best development year ever.
Yum! Brands' third-quarter profitability is likely to have been pressured by weaker sales trends at Taco Bell U.S. following the food safety-related industry issue that emerged in July. The resulting decline in customer traffic and restaurant sales volumes is expected to have hurt operating leverage. Management estimates Taco Bell's third-quarter 2026 equity restaurant-level margins at 19-21%, reflecting lower sales, promotional investments to rebuild consumer confidence and the higher concentration of company-owned restaurants in more affected markets. These factors are likely to have weighed on the company's bottom line.
Our proven model does not conclusively predict 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. However, that is not the case here.
Earnings ESP for YUM: Yum! Brands has an Earnings ESP of -4.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Yum! Brands’ Zacks Rank: The company currently has a Zacks Rank #5 (Strong Sell).
Stocks With the Favorable Combination
Here are some 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.
In the to-be-reported quarter, Cracker Barrel’s earnings are expected to register a 100% year-over-year increase. CBRL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 228.6%.
Sweetgreen, Inc. (SG - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank of 2 at present.
In the to-be-reported quarter, Sweetgreen’s earnings are expected to register a 3.7% year-over-year decline. SG’s earnings lagged estimates in each of the trailing four quarters, with the average miss being 43%.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) currently has an Earnings ESP of +2.08% and a Zacks Rank of 3.
In the to-be-reported quarter, El Pollo Loco earnings are expected to decrease 11.1% year over year. LOCO’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.8%.
View the Zacks #1 Rank List
Image: Bigstock
YUM Set to Report Q3 Earnings: KFC Growth & Taco Bell Trends in Focus
Key Takeaways
Yum! Brands, Inc. (YUM - Free Report) is scheduled to report third-quarter 2026 results on Nov. 3, before the opening bell.
YUM’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 3.6%.
Trend in the Estimate Revision of YUM
The Zacks Consensus Estimate for third-quarter earnings per share (EPS) is pegged at $1.47, indicating a decline of 7% from $1.58 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $2.06 billion. The metric indicates a rise of 3.9% from the year-ago quarter’s figure.
Let us take a look at how things might have shaped up in the quarter to be reported.
Factors Likely to Shape YUM’s Quarterly Results
KFC is likely to have been a key contributor to Yum! Brands' top-line growth in third-quarter 2026. The brand continues to benefit from strong demand for chicken, international expansion and menu innovation. Its performance in markets such as the United Kingdom, Japan, Korea and Brazil reflects the benefits of locally relevant offerings and promotional initiatives. The introduction of new chicken tenders, an expanded range of sauces and the Kwench beverage platform is expected to have strengthened menu appeal and encouraged customer spending. Additionally, continued restaurant expansion, particularly in emerging markets, and growing loyalty program penetration are likely to have supported system sales.
Yum! Brands' expanding international presence, growing digital business and continued restaurant development are likely to have supported its third-quarter top line. Taco Bell International has been gaining traction in markets such as the United Kingdom, India and Canada, with localized menu offerings and digital engagement supporting growth. Meanwhile, the company's digital capabilities, including its Byte platform, loyalty programs and first-party ordering channels, have been helping strengthen customer relationships and drive sales. KFC's aggressive restaurant expansion also remains an important growth driver, with management expecting the brand to deliver its best development year ever.
Yum! Brands' third-quarter profitability is likely to have been pressured by weaker sales trends at Taco Bell U.S. following the food safety-related industry issue that emerged in July. The resulting decline in customer traffic and restaurant sales volumes is expected to have hurt operating leverage. Management estimates Taco Bell's third-quarter 2026 equity restaurant-level margins at 19-21%, reflecting lower sales, promotional investments to rebuild consumer confidence and the higher concentration of company-owned restaurants in more affected markets. These factors are likely to have weighed on the company's bottom line.
Yum! Brands, Inc. Price and EPS Surprise
Yum! Brands, Inc. price-eps-surprise | Yum! Brands, Inc. Quote
What Our Model Says About YUM Stock
Our proven model does not conclusively predict 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. However, that is not the case here.
Earnings ESP for YUM: Yum! Brands has an Earnings ESP of -4.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Yum! Brands’ Zacks Rank: The company currently has a Zacks Rank #5 (Strong Sell).
Stocks With the Favorable Combination
Here are some 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.
Cracker Barrel Old Country Store (CBRL - Free Report) currently has an Earnings ESP of +350.01% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the to-be-reported quarter, Cracker Barrel’s earnings are expected to register a 100% year-over-year increase. CBRL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 228.6%.
Sweetgreen, Inc. (SG - Free Report) has an Earnings ESP of +4.26% and a Zacks Rank of 2 at present.
In the to-be-reported quarter, Sweetgreen’s earnings are expected to register a 3.7% year-over-year decline. SG’s earnings lagged estimates in each of the trailing four quarters, with the average miss being 43%.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) currently has an Earnings ESP of +2.08% and a Zacks Rank of 3.
In the to-be-reported quarter, El Pollo Loco earnings are expected to decrease 11.1% year over year. LOCO’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.8%.