Yum Brands (YUM) saw its stock price plummet 5.11% during Friday's trading session, reflecting growing concerns over the impact of tariffs on the restaurant industry. The significant drop comes amid a broader sell-off in restaurant stocks, with several major players in the sector experiencing notable declines.

The sharp decline in Yum Brands' stock can be attributed to a combination of factors, primarily centered around the potential negative effects of recent tariffs on consumer spending and international sales. Analysts at Stifel warned that higher costs for U.S. companies reliant on imports may lead to price increases or layoffs, ultimately affecting consumer spending on dining out. Additionally, there are concerns about potential anti-American sentiment in overseas markets, which could impact the recent improvements in international sales trends for U.S.-based restaurant chains.

While Yum Brands and other restaurant stocks face challenges, the impact of tariffs on food costs is expected to be limited for most restaurants. However, the industry may still suffer from reduced consumer spending as tariffs are likely to "hit wallets harder than kitchens," according to Stifel analyst Chris O'Cull. As economic uncertainties persist, investors appear to be reevaluating their positions in the restaurant sector, contributing to the significant drop in Yum Brands' stock price.