Shares of Yum Brands Inc. fell 2.2% in premarket trades Wednesday after the company reported weaker-than expected fourth-quarter profit and revenue.
The parent of Taco Bell, Pizza Hut and KFC fast-food restaurants reported net income of $ 463 million, or $ 1.62 a share, compared with net income of $ 371 million, or $ 1.29 a share, in the prior year’s quarter. On an adjusted basis, Yum YUM, +0.74% reported earnings of $ 1.26 a share, compared with $ 1.32 a share in the same period last year, and below the FactSet consensus of $ 1.40. Yum Brands said earnings were impacted by a 23-cent headwind from fluctuations in its quarterly tax rate.
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Revenue rose 1% to $ 2.04 billion from $ 2.02 billion in the same period last year. Analysts surveyed by FactSet were looking for sales of $ 2.11 billion. The company’s same-store sales grew 1%. Analysts surveyed by FactSet were looking for same-store sales growth of 3.7%.
Yum’s KFC division had same-store sales growth of 2% during the fourth quarter, compared with 5% growth in the prior year’s quarter, while the Taco Bell division had same-store sales growth of 3%, compared with 11% growth in the same period last year. The Pizza Hut division had a same-store sales decline of 2%, compared with growth of 1% in the year-ago quarter.
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During 2023, Yum said it opened a record 4,754 gross units. “We also made massive strides in scaling our proprietary digital and AI-driven ecosystem in partnership with our franchisees,” said Yum Brands CEO David Gibbs, in a statement. In 2024, the company expects to cross 30,000 restaurants at KFC, 20,000 at Pizza Hut and over 60,000 globally for Yum, he added.
Shares of Yum have fallen 3.2% in the last 52 weeks, compared with the S&P 500 index’s SPX gain of 20.3%.