YUM! Brands, Inc. YUM reported fourth-quarter 2024 results, with adjusted earnings and total revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.

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The company’s top-line performance reflected solid contributions from the KFC, Pizza Hut and Taco Bell divisions. The company reported progress in the digital space, with digital sales rising approximately 15% and the digital mix surpassing 50%, moving closer to its long-term goal of 100% digital sales. It strengthened its digital ecosystem with the launch of Byte by Yum!, a proprietary SaaS platform, to streamline restaurant operations through integrated technology solutions.

Following the earnings release, YUM stock inched up 3% in the pre-market trading session.

YUM’s Q4 Earnings and Revenue Discussion

In the quarter under review, YUM reported adjusted earnings per share (EPS) of $1.61, beating the Zacks Consensus Estimate of $1.58 by 1.9%. The bottom line increased 28% from $1.26 reported in the year-ago quarter.

Yum! Brands, Inc. Price, Consensus and EPS Surprise

Yum! Brands, Inc. price-consensus-eps-surprise-chart | Yum! Brands, Inc. Quote

Quarterly revenues of $2.36 billion beat the consensus mark of $2.32 billion by 1.8%. The top line rose 16% on a year-over-year basis.

Worldwide system sales — excluding foreign currency translation — grew 8% year over year, with Taco Bell increasing 14% and KFC rising 6%. The metric rose 3% year over year for Pizza Hut.

Divisional Performance of YUM

YUM! Brands primarily announces results under four divisions: KFC, Pizza Hut, Taco Bell and Habit Burger Grill.

KFC: Revenues at the KFC division totaled $965 million, up 27% year over year. Our model predicted the metric to increase 18% from a year ago. During the quarter, the segment’s comps growth was flat compared with the 2% gain reported in the prior-year quarter.

The division’s operating margin contracted 430 basis points (bps) year over year to 39%. In the quarter, the KFC division opened 1,100 gross new restaurants.

Pizza Hut: This division’s revenues amounted to $293 million, up 4% year over year. Our model predicted the metric to increase 5.1% from the prior-year level. Comps decreased 1% year over year compared with the 2% fall reported in the year-ago quarter.

The division’s operating margin contracted 260 bps year over year to 32.4%. Pizza Hut division opened 512 gross new restaurants during the fourth quarter.

Taco Bell: The quarterly revenues of this division were $930 million, up 14% year over year. Our model predicted the metric to increase 7.6% from the year-earlier level. Comps increased 5% year over year compared with 3% reported in the prior-year quarter.

The division’s operating margin expanded 160 bps year over year to 36.5%. Taco Bell opened 186 gross new restaurants.

Habit Burger Grill: The division’s revenues amounted to $192 million, compared with $175 million reported in the prior year quarter. Our model predicted the metric to increase 9.1% year over year.

During the quarter, the segment’s comps growth was flat against the 4% decline reported in the prior-year quarter. In the quarter, the division opened six gross new restaurants.

Other Financial Details of YUM! Brands

As of Dec. 31, 2024, the company’s cash and cash equivalents totaled $616 million compared with $512 million at 2023-end. Long-term debt, as of the end of the fourth quarter, was $11.3 billion compared with $11.14 billion at 2023-end.

The company declared a 6% dividend hike to 71 cents per share, payable on March 7, 2025, to its shareholders of record as of Feb. 21, 2025.

YUM 2024 Highlights

Total revenues in 2024 amounted to $7.5 billion compared with $7.1 billion in 2023.

Net Income in 2024 totaled $1.49 billion compared with $1.6 billion in 2023.

In 2024, adjusted EPS came in at $5.48 compared with $5.17 reported in the previous year.

YUM’s Zacks Rank & Key Picks

YUM! Brands currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Zacks Retail – Restaurants industry are:

Brinker International, Inc. EAT presently sports a Zacks Rank #1 (Strong Buy). EAT has a trailing four-quarter earnings surprise of 24.7%, on average. The stock has surged 321.9% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.

The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 17.2% and 92.9%, respectively, from the year-ago period’s levels.

Kura Sushi USA, Inc. KRUS currently sports a Zacks Rank of 1. KRUS has a trailing four-quarter negative earnings surprise of 70.8%, on average. The stock has declined 20.6% in the past year.

The Zacks Consensus Estimate for KRUS’ 2025 sales and EPS indicates a rise of 18.3% and 237.5%, respectively, from the year-ago period’s levels.

Potbelly Corporation PBPB currently carries a Zacks Rank #2 (Buy). PBPB has a trailing four-quarter earnings surprise of 67.5%, on average. The stock has gained 7.4% in the past year.

The consensus estimate for PBPB’s 2025 sales and EPS indicates growth of 4.3% and 12.5%, respectively, from the year-ago period’s levels.

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