YUM! Brands, Inc. YUM is scheduled to report fourth-quarter 2024 results on Feb. 6, before the opening bell. In the last reported quarter, the company’s bottom line missed the Zacks Consensus Estimate by 2.8%.

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YUM’s Q4 Estimates

The Zacks Consensus Estimate for earnings per share is pegged at $1.58, indicating a gain of 25.4% from the prior-year quarter. In the past 30 days, the consensus estimate for current-quarter earnings has witnessed downward revision of 0.6%. The Zacks Consensus Estimate for revenues is pegged at $2.32 billion, implying growth of 14% from $2.04 billion in the prior-year quarter.

Factors to Note Ahead of YUM’s Q4 Results

Yum! Brands results in the quarter to be reported is likely to be aided by an increase in same-store sales, expansion efforts, both domestically and internationally, and menu innovation. Notably, stellar performance from its flagship brand, KFC, is expected to have played a significant role in driving overall revenue growth.

YUM’s integration of a recommended ordering system, powered by AI and machine learning, is anticipated to have a positive impact on its operational efficiency and customer experience. By leveraging data analytics and AI-driven insights, the company aims to personalize the ordering experience for its customers, thereby enhancing satisfaction and driving incremental sales.

Our model predicts, the company’s same-store sales will demonstrate growth of 0.2% year over year in the to-be-reported quarter.

In fourth-quarter 2024, our model predicts KFC, Taco Bell and Habit Burger revenues to increase 18%, 7.6% and 9.1%, respectively, from the year-ago levels to $897.8 million, $881.5 million and $191 million. Moreover, we expect Pizza Hut revenues to increase 5.1% from the prior-year levels to $295.3 million.

An increase in the cost of employee wages, benefits and insurance, and other operating costs such as rent and energy costs, is expected to have put pressure on YUM’s margins. Our model predicts total costs and expenses to have increased 6.9% from the year-earlier levels.

What the Zacks Model Unveils About YUM

Our proven model does not conclusively predict an earnings beat for Yum! Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Yum! Brands has an Earnings ESP (difference between the Most Accurate Estimate and the Zacks Consensus Estimate) of +0.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Yum! Brands currently carries a Zacks Rank #4 (Sell).

Stocks Poised to Beat Earnings Estimates

Here are some stocks worth considering from the Zacks Retail-Wholesale space, as our model shows that these have the right combination of elements to beat on earnings this season.

Chipotle Mexican Grill, Inc. CMG has an Earnings ESP of +1.00% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CMG’s earnings for the to-be-reported quarter are expected to increase 14.3% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average surprise of 9.8%.

The Cheesecake Factory Incorporated CAKE currently has an Earnings ESP of +2.20% and a Zacks Rank of 2.

CAKE’s earnings for the to-be-reported quarter are expected to increase 13.8% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average earnings surprise of 14.1%.

CAVA Group, Inc. CAVA has an Earnings ESP of +8.89% and a Zacks Rank of 3 at present.

CAVA’s earnings for the to-be-reported quarter are expected to increase 200% year over year. It reported better-than-expected earnings in each of the trailing four quarters, delivering an average surprise of 91.8%.

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Yum! Brands, Inc. (YUM) : Free Stock Analysis Report

Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report

The Cheesecake Factory Incorporated (CAKE) : Free Stock Analysis Report

CAVA Group, Inc. (CAVA) : Free Stock Analysis Report

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