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,
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.
Related: Yum’s KFC division agrees to acquire more than 200 KFC restaurants in the UK and Ireland from franchisee EG Group
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%.
