Yum Brands, the parent company of fast-food giant KFC, has reported impressive quarterly results that surpassed expectations. The company’s success was primarily driven by a remarkable 13% surge in comparable sales at KFC, surpassing predictions of 8.29% growth.
Analysts attribute this achievement to the strong demand for affordable meals and promotional offers, particularly among lower-income consumers. Yum Brands’ options like the popular 2-for-$5 fried chicken wrap and recent launches such as chicken nuggets have resonated with price-sensitive customers facing rising food prices.
CEO David Gibbs highlighted that KFC experienced significant growth in the United States, particularly among lower-income consumers, and also successfully attracted new, younger customers. Moreover, the company achieved worldwide expansion during the quarter, opening 600 new restaurants across 60 countries, further contributing to its impressive performance.
While Yum Brands’ revenue rose by 3% to $1.69 billion, it fell short of estimates, originally set at $1.75 billion. This was primarily due to weaker-than-expected sales at Taco Bell and Pizza Hut, both subsidiaries of the company. Nevertheless, Yum Brands’ value offerings have managed to attract customers from higher-income levels, as diners commonly choose to trade down from higher-priced fast-casual restaurants to the company’s chains.
Excluding certain items, Yum Brands reported earnings of $1.41 per share, surpassing estimates of $1.24 per share. Additionally, the company’s total same-store sales increased by a notable 9%, exceeding analysts’ predictions of a 7.01% rise.
In response to the positive news, Yum Brands’ shares experienced a marginal increase during early trading hours. This impressive performance demonstrates the company’s ability to deliver strong sales and profit growth, cementing its position as a leader in the fast-food industry.
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