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August 4, 2022

Yum! Brands Q2 net income plummets 43%

Worldwide system sales grew 3%, with KFC at 1%, Taco Bell at 10% and Pizza Hut flat.

Yum! Brands, the parent company of KFC, Pizza Hut and Taco Bell, has reported a net income of $224m for the second quarter of 2022, down 43% compared with $391m a year ago.

For the quarter that ended on 30 June, total revenues increased to $1.64bn, from $1.60bn in the year-ago quarter.

The company’s worldwide system sales grew 3%, excluding foreign currency translation, with KFC at 1%, Taco Bell at 10% and Pizza Hut flat.

During the quarter, the company’s KFC Division opened 405 gross new restaurants in 54 countries and removed 1,112 units in Russia from its global KFC unit count.

The company said that its exit from the Russian market negatively impacted the year-over-year operating profit growth of the KFC Division.

The same-store sales of the KFC Division ex-China increased by 7%.

Yum! Brands said that the closure of its Russian business did not impact its same-store sales results for the quarter

The Taco Bell division sales in the US increased by 9% while the international system sales grew 31%. US same-store sales were up by 8% and Taco Bell International same-store sales grew 9%.

Taco Bell company-owned restaurant margins were approximately 26% and were in-line year-over-year.

In response to the Russian invasion of Ukraine, Yum! Brands removed 53 Pizza Hut units in Russia from its global unit count.

In June, Yum! Brands transferred the ownership of its Pizza Hut Russia business to a local operator.

The Pizza Hut division opened 287 gross new restaurants in 43 countries during the second quarter. Its international same-store sales ex-China grew by 6%.

However, the foreign currency translation unfavourably impacted operating profit by $3m, the company said.

Yum! brands Habit Burger Grill Division’s system sales grew by 10% and same-store sales decreased by 4% in the second quarter. It opened seven gross new restaurants in the US.

Overall, the company added 781 gross units during the latest quarter, with 463 net-new units, which was offset by the exclusion of 1,165 Russian units for a total decline of 702 units in the unit count.

Yum! Brands CEO David Gibbs said: “Our second quarter system sales grew 5% excluding Russia, driven by sustained development momentum.

“We are pleased with the continued growth of our digital business with digital sales of nearly $6bn, fuelled by the adoption of our global platforms and capabilities.”

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