Yum Brands Inc, the parent company of Taco Bell, exceeded the expectations of analysts at Wall Street for its quarterly revenue and earnings, driven by robust demand for its fried chicken and tacos offset a sales slowdown at its Pizza Hut brand.
Customers in the United States, Canada, and Europe returned to the company’s restaurants following vaccinations which benefitted the company, even as there were mounting fears about the Delta variant of the coronavirus which kept some customers away from its physical stores in other areas.
Chipotle Mexican Grill and McDonald’s both had great third-quarter results, thanks to product pricing increases and the reopening of sitting spaces in respective locations.
“We did see a return to dine-in, yet we saw digital sales go up … that is still something that is going to continue to grow for us,” Yum Brands Chief Executive Officer David Gibbs said on a call with analysts.
During the latest completed quarter, its breakfast menu was reintroduced by Taco Bell which partly drove the company to report an 8 per cent rise in its system sales – excluding the impact of foreign currency translation, while KFC reported a 3 per cent increase in sales in the US.
However, Yum Brands’ Pizza Hut segment witnessed a 2 per cent dip in system sales in the third quarter, as pizza chains, in general, are having to deal with a downturn in delivery demand after a spike during the pandemic induced lockdowns last year.
The company’s stock was down 1 per cent to $124.81 per share.
Domino’s Pizza Inc., a competitor, reported its first dip in same-store sales in nearly a decade earlier this month, citing a shortage in the labor market and a driver shortage.
It was in a good position to deal with rising prices and labor shortages throughout the sector, Yum Brands said.
The firm posted an adjusted profit of $1.22 per share on $1.61 billion in revenue, exceeding analysts’ expectations of $1.08 per share on $1.59 billion in revenue.
(Adapted from Reuters.com)