Yum Brands reported stronger-than-expected same-store sales growth in the first quarter, led by robust demand at Taco Bell and KFC's international operations, even as revenue fell short of Wall Street expectations and Pizza Hut posted another quarterly decline.
Global same-store sales rose 3% for the three months ended March 31, topping analysts' consensus estimate of 2.76%, according to LSEG. The performance was underpinned by a 9% jump at Taco Bell and 3% growth at KFC's international division, which together generate more than 80% of Yum's operating profit.
Net income for the quarter fell to $253 million, or 90 cents per share, from $314 million, or $1.10, a year ago. On an adjusted basis, excluding costs tied to KFC's U.S. headquarters relocation and other items, earnings came in at $1.30 per share, slightly ahead of the $1.29 average estimate.
Revenue totaled $1.79 billion, below analysts' forecast of $1.85 billion. Yum reported a 12% increase in net sales across all brands.
Taco Bell continued to outperform the broader quick-service sector. Foot traffic at U.S. locations rose 3.7% in the first quarter, compared to a 1.6% drop for the overall category, according to Placer.ai. The brand's emphasis on value helped attract budget-conscious diners, with bundled meal deals ranging from $5 to $9.
In contrast, Pizza Hut posted a 2% global same-store sales decline, worse than the 0.1% drop expected by StreetAccount. U.S. same-store sales fell 5%, while international sales were flat. KFC's global same-store sales rose 2%, ahead of the 1.4% forecast, but its U.S. business contracted 1% amid rising competition from Wingstop and Raising Cane's.
System sales in China, Yum's largest market, climbed 3%, following a 5% increase in the previous quarter.
Digital orders-through mobile apps and kiosks-accounted for 55% of total sales. CEO David Gibbs, who announced plans to retire in early 2026, said the board is actively searching for his successor.
Yum reiterated its long-term target of 8% annual core operating profit growth, even as U.S. consumer sentiment weakens under persistent inflation and shifting spending habits.
